Oral Answers to Questions

WORK AND PENSIONS

The Secretary of State was asked—

Pensioner Benefits

Rosie Cooper: What steps his Department is taking to increase the take-up of benefit entitlements by pensioners.

Mike O'Brien: We want every pensioner to claim the benefits to which they are entitled, which is why we are making it easier and more straightforward for them to do so. Pensioners can claim a number of benefits by making a telephone call, and the Department will then send them forms to fill in for council tax benefit. Some pensioners do not send those forms in, so, as from October, the process will be done automatically, obviating the need to send in forms. Pensioners will be covered for state pensions, pension credit, housing benefit and council tax benefit—one telephone call for all benefits.

Rosie Cooper: To what extent does the Department work in partnership with non-governmental organisations that deal with the elderly and with partner organisations such as the health service, which may enable us to target pensioner groups? Does the Minister have any plans to extend that? Over-75s receive free television licences, but do we use that information to ensure that people who are eligible are targeted?

Mike O'Brien: We have access to information, particularly on winter fuel payments, that covers large numbers of pensioners and gives us quite a lot of data on where they are. We work with Help the Aged, Age Concern, citizens advice bureaux, Community Service Volunteers and others to increase the take-up of benefits, and partnerships have been developed with local authorities, too. The aim is to develop joint working partnerships so that we can raise take-up across all the benefits. There are no official links with the NHS as such—we co-ordinate through Departments, but there are not official links locally. We often receive referrals from GPs, hospitals and carers, and the Disability and Carers Service works closely with the Department of Health.

Michael Penning: Will the Minister confirm that many of my constituents who formerly worked for Dexion and had their pensions stolen from them no longer need to take up benefits, because they will receive compensation from the financial assistance scheme? Will he confirm that the Treasury will not—as a result of Government delay in giving my constituents the compensation that they deserve—take up to 40 per cent. tax from my constituents who have got their pensions through FAS?

Mike O'Brien: The hon. Gentleman will be pleased to know that, this morning, I was able to talk to his constituent, Mr. Humphries, and tell him that we hoped to make an announcement today that the Treasury had agreed that the lump sum payments to be paid to various FAS recipients can be taxed in a way that means that most of those people—it depends on their tax circumstances—will not be pushed into the higher tax bracket as a result of those lump sum payments, so they can spread their tax payment over time. I am sure that the hon. Gentleman's constituent will welcome that, and that he will, too.

Michael Clapham: One of the benefits that pensioners draw, as my hon. and learned Friend will be aware, is the pension element of the industrial injuries disablement benefit. May I draw his attention to the fact that his Department has received a recommendation from the Industrial Injuries Advisory Council relating to men who worked in the screens on the colliery surfaces during the 40 years up to 1983, proposing that provision for COPD—chronic obstructive pulmonary disease—be extended to cover that group of workers? Will he look urgently at that decision, because the group of men who would claim that benefit are elderly, and we need to ensure that those who are eligible can claim industrial injuries disablement benefit and, in addition, explore whether there is a full and final payment of compensation, similar to that paid to their underground colleagues? It is urgent that that decision be looked at and the recommendation accepted.

Mike O'Brien: I can certainly assure my hon. Friend that we will look at that as a matter of urgency. He knows that I, too, represent an area with a working colliery and a large mining community, and these matters are important to such communities.

Peter Bottomley: There will be a welcome from Members on both sides of the House if that review is successful. Is the Minister satisfied with the situation of men over 60 in relatively low-paid full-time work who are not automatically reminded that they are eligible for winter fuel payment? Will he look at that to see whether he can make a change to procedures?

Mike O'Brien: We want to ensure that everyone who is entitled to the winter fuel payment registers to receive it. There is a substantial advertising campaign to ensure that we get that take-up, but people have to register. Indeed, they should have registered already to take up the winter fuel payment this year.

Frank Field: Will the Minister convey the thanks of many Members of Parliament to the Pension Service for the quality of care it gives many of our constituents? Given that it is the Government's aim to increase take-up, what is his estimate for the coming years of the increased number of pensioners claiming the benefits to which they are entitled?

Mike O'Brien: I am pleased to be able to tell my right hon. Friend that our target for the year finishing tomorrow was to get 235,000 people on to pension credit. In fact, we have reached 250,000, so we have gone beyond that figure. I have indicated that I want to see it increased during the coming year, so I am pleased to tell him that we are continuing to press to get more people on to pension credit.

Danny Alexander: The Minister says that he wants to increase take-up and I welcome that, but the Budget tells a different story. If the Government were intending to get the benefits to every eligible pensioner, by 2010-11, an extra £1.75 billion would have been allocated in the Budget. Instead, the Budget assumes no increase in take-up over the next three years. How is he getting on with persuading the Treasury that getting the benefits to the pensioners who are entitled to them is not poor value for money, as the Treasury seems to assume?

Mike O'Brien: We certainly want to get benefits to all the pensioners who are entitled to them. That is one of the reasons why, just before Christmas, I announced the introduction of automaticity, which sounds complicated but basically means that with one phone call a person can obtain four different benefits.
	The process of getting the benefits needs to be simplified. One of the problems that we have had in getting people on to pension credit is that we have written to pensioners—in some cases, four or five times—asking them to apply, and some have chosen not to do so. We cannot force them to apply; it is their decision. However, for those who apply, we can make it easier to get the benefits. That is why, from October, we will introduce the new system of automaticity, where those who get one benefit will get four.

Sally Keeble: Will my hon. and learned Friend explain how the various Departments are co-operating in promoting benefits for pensioners? He will know that take-up of concessionary bus passes is not particularly high. In my area, they are claimed by about 57 per cent. of pensioners. Will the Pension Service remind pensioners of the enhanced benefits of the scheme and encourage them to apply?

Mike O'Brien: We certainly want everyone who wishes to have a concessionary bus pass to take up that concession. We will rely on local authorities to promote the project. One of the issues is that local authorities in different areas have different start and finish times. Although the Government are promoting a national scheme and paying for a certain proportion of it, some local authorities have felt able to go beyond that and have raised the extra funding from the council tax system. As a result, running a national campaign is a lot more difficult, but there has been plenty of national publicity, MPs and Ministers have been promoting the scheme, and the Government are proud of the fact that we have introduced it and ensured that pensioners can travel on local services around the country at off-peak times. That is something we have done; the Conservative party never even attempted it when it was in government.

Nigel Waterson: Any measures to boost take-up of benefits are welcome and long overdue, but has the Minister made any estimate of the number of pensioners who are forced to use their winter fuel allowance to pay soaring council tax and utility bills and to pay for basic foodstuffs? Is he not ashamed that the latest EU figures show that Britain is fourth from the bottom of the poverty league, so that only pensioners in Spain, Latvia and Cyprus are more likely to fall into poverty?

Mike O'Brien: We are the party that has lifted more than 1 million pensioners out of relative poverty. It takes some brass neck for Conservatives, who wanted to increase VAT on fuel to 17.5 per cent. and keep pensioners on basic pensions of £69, to say that they are now worried about pensioners. They seem to worry about the poor pensioner only when someone else is in government.
	The Government are making winter fuel payments to deal with fuel poverty issues. We are ensuring that people who need help because they are poor are getting pension credit, and that we deal with the issues related to take-up. The Government whom the hon. Gentleman supported did nothing, and he has some brass neck to suggest otherwise.

John Grogan: Is my hon. and learned Friend considering renaming council tax benefit "council tax rebate", as advocated by Sir Michael Lyons, to increase take-up among pensioners? Would it be possible to link the systems and computers of the Inland Revenue with those of local government to ensure automatic payment of council tax benefit?

Mike O'Brien: I always hesitate to assure people that it is easy to link computer systems; it is not always easy. However, we work with Her Majesty's Revenue and Customs and the Treasury to see where we can share data to ensure that we get the information we need to target pension credit in particular. After October, pension credit will be linked to council tax benefit, so it will be possible to ensure that people who claim one get the other as well.

Local Employment Partnerships

Anne Moffat: What progress has been made by local employment partnerships in assisting disadvantaged people into work; and if he will make a statement.

Stephen Timms: Local employment partnerships have started well. The initiative is growing rapidly; more than 600 employers have signed up and more than 200 have already recruited through their partnerships, helping more than 3,000 people into work so far.

Anne Moffat: I thank my right hon. Friend for that answer. Is he aware of a partnership programme in Glasgow, whereby John Wheatley college takes deprived adults from communities and trains them to work in the health service? That has come about because of an innovative and dynamic principal called Ian Graham, who has taken chances to do it. It looks as though the initiative will be a great success.

Stephen Timms: I am pleased to say that I have heard about the achievements of Mr. Graham and John Wheatley college. The March employment figures show how strong the UK labour market is. More people than ever are in work and the numbers on unemployment benefit are down into the 700,000s for the first time since 1975. Local employment partnerships such as the one in my hon. Friend's area will help to ensure that the benefits of a strong labour market extend to disadvantaged jobseekers who have been out of work for a long time. I welcome the progress being made in her area.

Anne McIntosh: Is the Minister aware that one of the partners—Carter and Carter, I believe—that had been due to deliver on the partnership scheme in North Yorkshire has gone into receivership? What are the implications for North Yorkshire, and who will now deliver on that partnership?

Stephen Timms: I am aware of the problems that have beset Carter and Carter Group plc. However, I can tell the hon. Lady that Newcastle college is taking over the contracts for which Carter and Carter was responsible. She can be reassured that there will be continuity of support for her constituents and others.

Claire Curtis-Thomas: I want to take this opportunity to congratulate the Minister on what the Government have done to get disadvantaged people—particularly people with severe learning difficulties, who were totally ignored by the previous Administration—into work. However, getting people with such difficulties into work-based opportunities is still proving a tremendous challenge, for obvious reasons. Will my right hon. Friend agree to meet me and representatives from my local employment partnership, the Shaw Trust and Mencap, to discuss what more can be done locally in Crosby to help such people?

Stephen Timms: Yes, I would be delighted to meet my hon. Friend and representatives of the organisations she mentions. Those organisations have done excellent work, not only in her constituency but elsewhere, under the auspices of the pathways to work programme and other initiatives that we have been supporting. We have been able to make good progress, but I look forward to discussing with her what is happening in her constituency.

Personalised Support

Christine Russell: What steps he is taking to provide personalised support for those out of work.

James Purnell: Employment increased last month to a new record high of 29.46 million and claimant unemployment has fallen to its lowest since 1975. Our six different new deals have helped 1.85 million people into work. We are now merging the new deals for jobseekers into a single, flexible new deal to tailor the support to the needs of each person.

Christine Russell: In my constituency, there are now 1.25 jobs for every person of employment age. That is a huge success, but there are still large numbers of people on incapacity benefit who have been out of work for many years, and many of those people have acute mental health problems. Does my right hon. Friend agree that we have to do an awful lot more to help people with mental health problems to get back into training and, ultimately, back into the workplace?

James Purnell: Yes, that is absolutely right. We commissioned Dame Carol Black to consider that issue, and her report of last week gives us a good way of doing exactly that. We will continue to reform incapacity benefit, which we are committed to abolishing. In October, we will introduce the new employment and support allowance, which will be based on what people can do rather than what they cannot. That very much includes people with mental health problems. We are considering how we and the NHS can ensure that we give them the support to get them back into work.

Adrian Bailey: On Friday, I visited the Pertemps agency in West Bromwich and was very impressed with the fact that it has got 910 people, many of them long-term unemployed, back to work since last April. It was obvious from my discussions that barriers to employment relate not only to skills, but to psychological, cultural and a range of other factors. Will my right hon. Friend assure me that when the Government look to get people into work, their approach takes all those factors into account?

James Purnell: Yes, I can give my hon. Friend that assurance. That is exactly why we will involve the voluntary and private sectors in delivering personalised support to each of those individuals and will pay by result so that they have the freedom to decide how to get people back into work, but will be rewarded on the basis of how they do so.

Mark Harper: The Secretary of State has said that the Government will reassess all existing incapacity benefit claimants between 2010 and 2013. How many extra pathways to work opportunities will there be over and above those already announced to help those who are reassessed, where that is appropriate?

James Purnell: As the hon. Gentleman knows, we are extending pathways to work to the whole country from this April. I believe that his party has exactly the same goal as us on incapacity benefit. The Conservatives have announced that they want to match our goal of getting 1 million people off incapacity benefit, and we welcome their support for our policy. I hope that he will now stop promising completely non-existent welfare reform savings.

Child Poverty

Ian Lucas: What steps his Department is taking to tackle child poverty.

Ann McKechin: What steps his Department is taking to tackle child poverty.

James Purnell: On Budget day, we published "Ending child poverty: everybody's business", reaffirming the Government's target of halving child poverty by 2010 and eradicating it by 2020. The measures announced in the Budget will invest an additional £950 million and reduce child poverty by a further 250,000 children by 2010-11. Combined with announcements in last year's Budget and pre-Budget report, that means an extra 500,000 children will be lifted out of poverty.

Ian Lucas: I particularly welcome the Government's decision, announced in the Budget, to disregard child benefit for the purposes of council tax benefit and housing benefit claims from 2009. What steps will be taken next year to highlight that with all child benefit recipients?

James Purnell: My hon. Friend is right that this is a vital move towards making work pay, and I congratulate him on his campaigning on the issue. I believe that his early-day motion 1736 called for this last year, so he has clearly had a big influence on Government policy. It is a good thing that he has, because this measure, combined with others, means that 250,000 children will be lifted out of poverty. People will not have to apply for it—it will happen automatically—but we will ensure that they know that it, combined with other measures, means that work really does pay and that they can lift their family and children out of poverty.

Ann McKechin: As my right hon. Friend will be aware, it is also important that we have appropriate complementary as child care and early intervention policies. I understand that he will soon visit Scotland and very much hope that he will be able to visit Glasgow, where there are a number of very successful projects. Will he ensure that he clearly puts the message across to the Scottish National party Administration that they need urgently to consider their refusal to promise all vulnerable two-year-olds a place in nursery school, which had been promised by the previous Labour Administration, and that they need to do much more in prioritising child care support, which has received little attention?

James Purnell: That is absolutely right. I look forward to visiting Glasgow and seeing the innovative work of the Labour council. It is shocking to hear that the SNP is not committed to lifting children out of poverty. If it genuinely believes that this issue needs to be addressed, it must not cut child care but ensure that it matches our policy of having a contract out of poverty whereby the Government put in place the right support through the tax and benefits system but parents do their bit as well, as regards their responsibilities.

Elfyn Llwyd: It was estimated 18 months ago that the Government would need to put in an extra £4.5 billion per annum if they were to have a 50:50 chance of meeting the 2010 target. The £950 million figure is welcome, but does it not mean that there is no chance of meeting the 2010 target?

James Purnell: No, the Government are committed to meeting the target, and the announcement in question was widely welcomed by the child poverty lobby. It means that we will be able to lift a further 1 million children out of poverty. That is an extraordinary achievement in itself, but we will continue to do everything we can to meet the 2010 target, and to eradicate poverty by 2020.

John Bercow: Children and young people with special educational needs are among those most obviously at risk of poverty. Of course, as the hon. Member for Glasgow, North (Ann McKechin) said a few moments ago from the Government Benches, early intervention is of the essence, but some people need help later on.
	Given that the Department for Children, Schools and Families is committed to raising the education leaving age, what discussions has the right hon. Gentleman had with his colleagues in that Department about the importance of ensuring that continuing support is made available, not least through the Connexions service, so that those people have a good chance of escaping from poverty and ensuring that their children do not go on to suffer it?

James Purnell: The hon. Gentleman is absolutely right and his work on the issue is widely recognised throughout the House. He will be glad to know that there is a joint unit working between my Department and the Department for Children, Schools and Families because we recognise that this is a two-way bargain: the Government put in place the right support through the tax and benefit system, and the education and nursery systems help people to lift themselves out of poverty and get the skills that they need to succeed in life.
	We need to ensure that disabled children are helped, which is why we try to ensure that people claim disability living allowance. We also need to look at the needs of teenage mothers. We have announced a pilot to look at how we can provide them with more support, in combination with the Foyer system, to ensure that they can be lifted out of poverty as well.

Barry Sheerman: Does my right hon. Friend agree that although the Government have done much to eradicate child poverty, there is much to be done? It is a difficult proposition. However, he now has the talents of David Freud in his Department, and I wonder whether he could carefully apply David Freud's talents to consider a more joined-up approach to child poverty over many more years.

James Purnell: We are, of course, implementing David Freud's recommendations, and my hon. Friend is right to say that he is advising the Department on exactly how to do that. We welcome anyone's thoughts on how to abolish child poverty and we shall look to work with the child poverty lobby and anybody else on refreshing our strategy to meet the goal of taking children out of poverty by 2020.

Andrew Selous: We in my party also want to see child poverty ended by 2020, but believe this vital objective is being undermined by the Government failing fully to recognise and tackle some of the deep-seated causes of child poverty. So, do the Government agree that while poverty contributes to parental separation, single parenthood is also a major cause of poverty? A reduction in the couple penalty would be socially just, so that marriage was no longer increasingly the preserve of the middle classes, which last week's figures from the Office for National Statistics show to be the case.

James Purnell: I have real respect for the hon. Gentleman, but, frankly, I find that question hypocritical enough to be almost unbearable. The Conservative party is not even—

Mr. Speaker: Order. Please withdraw the term "hypocritical". The right hon. Gentleman is referring to a Member of the House.

James Purnell: I withdraw it, but the hon. Gentleman—

Mr. Speaker: Order. "I withdraw"—no buts.

James Purnell: I withdraw. The party of the hon. Member for South-West Bedfordshire (Andrew Selous) will not even sign up to the goal of abolishing child poverty. It has no policy to deliver on that, and it voted against the measures in the Budget. As he knows, those in his party are not committed to that goal, and that difference between what they try to say and their policies will be exposed between now and election day.

Carers

Helen Jones: What progress has been made on reviewing support for working carers; and if he will make a statement.

Anne McGuire: The carer's allowance earnings limit was increased to £95 a week in October 2007. The current review of the national carers strategy is looking in depth at the full range of support that is provided to carers, including working carers. This is being done in consultation with carers and the organisations that represent them.

Helen Jones: I thank my hon. Friend for that answer and for her personal commitment to solving the problem. It is widely agreed that carers who can and want to should be able to combine their caring responsibilities with paid employment, which is beneficial for them and society, so will she ensure that the review looks not only at the earnings limit, which remains low, despite the increase, but at making it easier for working carers who qualify for carer's allowance to claim it without having to make trips back and forth to the benefit office every week, as many of them have to do?

Anne McGuire: I thank my hon. Friend not only for the question, but for the way she has championed carers' rights over her years in the Commons. I am sure that she will be delighted to know that one of the taskforces will consider wider issues of employment—not only income and benefits, but how carers can be encouraged and supported to balance their caring responsibilities and employment. Of course, we are always looking at ways to make the application process for our benefits far more straightforward.

Philip Hollobone: Carers do a wonderful job and save the state hundreds of millions of pounds every year. Does the Minister recognise that demographic change, especially in counties such as Northamptonshire, means that many more very elderly people in our local populations will require greater support?

Anne McGuire: We are all aware that there is a demographic issue about caring responsibilities. That is why I would have hoped that the hon. Gentleman welcomed the Prime Minister's establishing the review of our national carers strategy, which will obviously take into account some of the demographic issues that the hon. Gentleman highlighted—in relation to not only his constituency, but the whole country.

Anne Begg: Does my hon. Friend agree that one of the best ways to support carers to get into work is to provide good quality respite or day care? She will not be surprised to find out that Aberdeen city council, as part of the £27 million of cuts in its budget, is closing day centres and taking away day care, thus probably making it much more difficult for many carers in Aberdeen to carry on with their work. It has done all that without undertaking any disability impact study on the consequences of its decision.

Anne McGuire: It is astonishing, given the statutory requirement under the disability equality duty, that a local authority has not conducted an impact assessment of the change in its services. My hon. Friend and my hon. Friend the Member for Aberdeen, North (Mr. Doran) are working hard to ensure that Aberdeen council faces up to its responsibilities. If there is anything I can do to assist, I would be only too delighted to help. This is an interesting decision by an alliance of the SNP and Liberal Democrats in Aberdeen.

Chris McCafferty: Does the Minister accept that many carers can and wish to work only part time, and that those for whom they care would often prefer to be cared for in-house when their permanent carer is out at work? During the review, will she look carefully at enabling long-term carers to afford such provision?

Anne McGuire: All those issues have been raised as part of the review of the national carers strategy. Of course, the strategy is a cross-governmental development. As well as the issues for which the Department for Work and Pensions is responsible, including employment and income, we are working closely with the Department of Health, which is examining some of the social care issues. Carers' organisations and carers have raised the very issues that my hon. Friend mentioned.

Lone Parents

Willie Rennie: What safeguards his Department plans to put in place to ensure that lone parents who cannot find suitable child care will not be required to take up jobs under the jobseeker's allowance regulatory framework.

Stephen Timms: We will be amending regulations to increase the discretion of Jobcentre Plus advisers, so that a lone parent claiming jobseeker's allowance will not be penalised for leaving or failing to take up a job on the ground that appropriate, affordable child care is not available.

Willie Rennie: I thank the Minister for that response, but what assurance can he give lone parents that additional costs, such as free or half-price transport in London and the free school meals entitlement under income support, will be taken into account in those calculations, too?

Stephen Timms: My right hon. Friend the Secretary of State and I met lone parent support groups last week and we discussed how the amendment to the regulations to which I have referred might work. Jobcentre Plus will support parents looking for child care and will recognise that other costs might be incurred as well. We want to maximise the opportunity for work and the contribution of work to reducing child poverty. The hon. Gentleman will acknowledge how big that contribution potentially is and how much children's well-being is improved when their parent is in work. That is the aim of the change that we are making.

Kerry McCarthy: The Minister will know that for many lone parents the problem is not so much finding work as the issue of churn—of entering jobs, but finding themselves unable to cope and having to give them up. I welcome what he said about ensuring that child care is taken into account when the conditionality of JSA is considered. Many lone parents will have had bad experiences of struggling with child care, so what steps will be taken to ensure they know that they will not be penalised if they have child care problems, so that they do not act as a disincentive to entering work?

Stephen Timms: My hon. Friend has taken a lot of interest in the matter, and I welcome the points that she and the lone parent support organisations have made. We are considering the precise form that the regulations will take. She will know that all local authorities in England and Wales will be required from next month to ensure that there is sufficient child care to meet the needs of working parents, particularly those on lower incomes. By 2010 we want all schools to be extended schools. Advisers will be given the discretion to ensure that lone parents will not lose out if no appropriate affordable child care is available for them.

Julie Kirkbride: But could the Minister tell the House whether he considers there to be any forms of work that might be inappropriate under the regulations? For example, would it be appropriate to ask a lone parent to do a considerable amount of evening and night work, bearing in mind that their children would be at school all day and not see their parent in the evening, but be left to the child care that the Minister thinks appropriate?

Stephen Timms: These are matters that advisers will be able to take into account. Lone parents should be able to be good parents as well as enjoy the benefits of employment. There is clear evidence not only that families are better off when a parent is in work, but that their children's well-being is improved.

Brian Jenkins: My right hon. Friend realises that it is not just lone parents, but all parents who sometimes experience difficulties in finding suitable child care. Will he make it a duty for local authorities or even jobcentres to keep a directory of available child care? Will he also publicise that directory and make it available to the people out there seeking the best child care for their children?

Stephen Timms: My hon. Friend makes an interesting point. It is likely that local authorities will want to do that, because all local authorities in England and Wales will from next month be required to
	"secure sufficient childcare to meet the needs of working parents".
	Local authorities will certainly want to ensure that information about that provision is widely available in their areas.

Jobcentre Plus

Ben Chapman: What proportion of telephone calls to Jobcentre Plus were answered in the most recent period for which figures are available.

James Plaskitt: In February 2008, Jobcentre Plus contact centres answered 95.4 per cent. of the more than 1.4 million calls offered, therefore comfortably exceeding the 90 per cent. target.

Ben Chapman: Although I commend Jobcentre Plus for the progress that it has made and for the targets that it has met, 5 per cent. of unanswered calls cut off with a message saying "Ring back later" is still a lot of people. Given that they are people desperately seeking work, when can we eliminate the 5 per cent. unanswered rate?

James Plaskitt: The 95.4 per cent. rate is very high. In the case of first contact, which involves people calling to arrange a benefit for the first time, which is perhaps the most urgent task that the centres have to perform, the answer rate is 98.1 per cent. Call managing and queue-busting systems have been introduced in the system and work effectively, but Jobcentre Plus is implementing further improvements to those schemes in June. I can also tell my hon. Friend that the whole system has been externally validated and has proven comparable to the best available anywhere in the private sector.

Andrew MacKay: I am not quite sure of the Minister's definition of an answer. For my constituents, who have to rely on the regional office in Canterbury, the problems are still great. They would just laugh if they heard the answer to that question.

James Plaskitt: Well, the local offices that are part of the benefit delivery centre do not at the moment have the exact same call management system that the call centres use. [Hon. Members: "Ah."] I was referring earlier to the call centres. The benefit delivery centres do not have the same system but they are planning to introduce it, and it will be in place by this summer, so they will be able to implement the system of call management and queue-busting that I referred to in the answer I gave to my hon. Friend the Member for Wirral, South (Ben Chapman). In any event, notwithstanding the absence of the precise measurement system, we believe that most benefit delivery centres are also hitting the 90 per cent. rate.

Incapacity Benefit

David Evennett: How many people had been on incapacity benefit for more than five years at the most recent date for which a figure is available.

Stephen Timms: Last May, the number of people who had been claiming incapacity benefit for over five years was 1.23 million, and it had fallen in the previous quarter.

David Evennett: I noted the Minister's reply to my hon. Friend the Member for Forest of Dean (Mr. Harper). However, of the 2.6 million people claiming incapacity benefit, 1.8 million began claiming during the past 10 years, since 1997. Does the Minister agree that the past 10 years have been a missed opportunity, in which not enough people of working age have been helped back to work? Surely we need real welfare reform now.

Stephen Timms: No, I certainly do not agree with that. The real scandal is that the number of incapacity benefit claimants more than tripled under the Tory Government, when the hon. Gentleman was a Government Member; incapacity benefit was used, for a long period, to disguise rising unemployment. We have reversed the position; the number of people claiming incapacity benefit is coming down for the first time in decades, thanks to the success of the reforms that we have introduced, including the pathways to work programme. Our aim is to reduce by a million the number of people receiving incapacity benefit by 2015. I had hoped that the hon. Gentleman would welcome the progress made.

Terry Rooney: My right hon. Friend will be aware that one of the key tools for helping incapacity benefit claimants back to work is the permitted work rules, but there are four separate permitted work regimes, which is very confusing for people. Will he today promise to look at that, and will he try to come up with a simple, single system that is easy for people to take advantage of, and to understand?

Stephen Timms: My hon. Friend has raised the issue before, and my right hon. Friend the Secretary of State will be writing to him about it shortly. I can confirm that we are looking into the very point that my hon. Friend raises.

Brian Iddon: My registered blind constituent, Mr. McCarthy-Fox, is concerned to ensure that work capability assessments are carried out by people who understand disabilities such as his. How will serious physical disabilities such as blindness and learning disabilities such as Down's syndrome be taken into account in those assessments, and when will my right hon. Friend publish the criteria for conducting the interviews?

Stephen Timms: My hon. Friend will know that the regulations for the employment and support allowance were published last week, and the work capability assessment is an important part of the process. We developed the procedures in close discussion with disability organisations. I think that it is widely recognised that the arrangements that will be put in place, including the work capability assessment, will be a considerable improvement on the current personal capability assessments. My hon. Friend is absolutely right, of course, that we need to make a proper and accurate assessment of all the conditions that people applying for the employment and support allowance may have, and I hope that when he looks at the details he will see that the new arrangements are a considerable improvement on the old ones.

Older People

Jim Sheridan: What steps his Department is taking to encourage employers to recognise the contribution of older people in the workplace.

Mike O'Brien: On Thursday I visited Heritage Glass in Shrewsbury, where the youngest salesman is 60 and the oldest is 73. The company has found that its business has been boosted by employing older people. The Government are encouraging employers to employ older people as part of a mixed work force, and to challenge some of the ageist myths that some still believe. The Employment Equality (Age) Regulations 2006 prohibit unjustified age discrimination in employment and training.

Jim Sheridan: I thank my hon. and learned Friend for that response. He will be aware that Glasgow city council recently announced that any school leaver wishing to take up an apprenticeship will be guaranteed that option, but that will work only if local employers and the elderly work force play their part. Some elderly skilled members of the work force currently on disablement benefit are more than capable of passing on their skills and talents to future generations. Will my hon. and learned Friend agree to meet like-minded Labour colleagues to talk through the issues, so that we make sure that people who have skills pass them on but do not lose their benefits?

Mike O'Brien: It is important for us to ensure that skills can be passed on, and I should be happy to meet my hon. Friend to discuss that. I can also tell him that my right hon. Friend the Secretary of State will visit Glasgow shortly and meet members of the city council, and that he will have an opportunity to discuss the project and some of the issues that my hon. Friend has raised.

Welfare to Work

Graham Allen: What recent progress has been made in implementing city strategies on welfare to work.

James Purnell: The city strategy pathfinders are committed to increasing employment in their area, and have agreed targets for the client groups on which they concentrate. The pathfinders have now moved into the delivery phase, and are rolling out their business plans.

Graham Allen: Does the Secretary of State agree that local strategic partnerships have an important role in bringing together health, skills, children's services, and communities and neighbourhoods? Does he agree that such linking and joined-up work is necessary at national level too, involving Departments other than his own and relating to housing in particular? The new proposals to enable single parents in socially registered housing who are using the Foyer scheme to return to work is one of the most important initiatives that I hope the Secretary of State will be able to encourage—and will he also ensure that he makes the time to visit Nottingham?

James Purnell: As my hon. Friend knows, I am looking forward to visiting Nottingham on 22 April. He is right in saying that local strategic partnerships have a key role to play. I congratulate him on his own role as chair of his local strategic partnership, which is one of the leading partnerships in implementing our employment city strategy. He is also right in saying that we need to work closely with other Departments at national level. That is why we introduced the working neighbourhood fund, which brings together funding from my Department and from the Department for Communities and Local Government so that with a single fund we can target the problem together.

Topical Questions

Simon Burns: If he will make a statement on his departmental responsibilities.

James Purnell: As a result of our announced extension of the financial assistance scheme, some people will receive FAS payments for a past period. Concern has been expressed that those people might be in a higher tax band. I am pleased to say that, as my right hon. Friend the Minister for Pensions Reform confirmed earlier, that will not happen. My officials are currently working with their colleagues in HM Revenue and Customs to establish how the work will be carried out.

Simon Burns: I thank the Secretary of State for his explanation. Can he tell us whether his target for eliminating child poverty is actually a target, or more of an aspiration?

James Purnell: The Conservatives should stop digging themselves into a hole. It is a target, and, as we have reaffirmed, we are committed to it. In the Budget we announced just under £1 billion of spending to take another 250,000 children out of poverty. The outrage is that the Conservative party voted against those measures.

Jim Dobbin: It is estimated that 1.5 million people's lives have been destroyed by involuntary tranquilliser addiction leading to long periods of mental ill health. A man whom I met recently had been on tranquillisers for 45 years. Those people want to work, but cannot do so. As far as I am aware, the only primary care trust that has introduced a withdrawal programme is Oldham. Will the Secretary of State encourage his Department and the Department of Health to study the Oldham model with the aim of getting some of those people off prescription drugs and back to work? That would improve their quality of life, and would reduce the benefits bill as well.

James Purnell: My hon. Friend has identified a serious problem, on which I know he has campaigned for some time. He will be glad to know that Dame Carol Black's review commits my Department and the Department of Health to working together closely on the issue, and that Dame Carol will use that work to ensure that we can help people with mental health problems. We are also working on our drug strategy to ensure that we can provide better support for people who wish to return to work.

Chris Grayling: Why is the Secretary of State providing free job advertising for sex clubs?

James Purnell: As the hon. Gentleman knows and as has been explained on many occasions, we advertise any jobs that are legal. I am sure that he would do exactly the same.

Chris Grayling: I have a selection here of adverts currently appearing on Jobcentre Plus websites. Many of them advertise jobs for the national minimum wage and they are quite clear—this one, in particular, says:
	"Duties require the successful applicant to be nude/semi nude".
	I regard asking women to work, naked or semi-naked, on the national minimum wage as exploitation. Why does not the Secretary of State share that view and why does he continue to condone Jobcentre Plus supporting vacancies like that?

James Purnell: In that case, if the hon. Gentleman believes that and he wants to have the means to live up to those ends, he will introduce proposals to ban those adverts. At the moment, it is legal and Jobcentre Plus obviously has a duty to comply with anything that is legal. The hon. Gentleman, however, has no proposals to do anything any differently.

Kevan Jones: I know that on quite a few occasions some parts of the Government have difficulty talking to other parts, but will the Minister explain why staff working on the MPs' hotline for the Child Support Agency cannot speak by telephone to the Bolton office, but have to put any matters in writing, which is leading to many delays? I have raised the matter previously in a written question, so may I urge the Minister, when he looks further into the issue, not simply to accept what his civil servants tell him? Clearly, even a year later, the problem is still going on.

James Plaskitt: I am grateful to my hon. Friend for raising that problem. As he knows, there were a series of problems with the Bolton office for a while, but in many cases, we have seen improvements. I have myself spoken to officials who are working on the MPs' hotline. I will take my hon. Friend's point seriously and I promise to look into it further for him in the light of what he has said.

Anthony Steen: If the Home Office has its way, migrant domestic workers will have a non-renewable six-month visa and will be unable to change employers. Is that not a recipe for increasing domestic abuse and trafficking? If the women come forward, they will be sent back home; and they cannot get another job because they will have only a non-transferable six-month visa. For a Government who are supposedly committed to stamping out trafficking, is that not an extraordinary proposal from the Home Office? Will the Minister do something about it?

Stephen Timms: I pay tribute to the hon. Gentleman's work as chair of the all-party group on the trafficking of women and children. As he knows, we are committed to implementing the Council of Europe convention on action against trafficking before the end of this year. My Department is working very closely with the Home Office and others on exactly how those arrangements will work. The convention envisages a two-step process and we are looking at granting a resident's permit in the second stage. We will discuss the details with the Home Office, so I would be interested to receive any representations from the hon. Gentleman about the detailed form that any such regulations should take.

Ben Chapman: Given that £133 million has been spent on developing systems within the CSA, can those of my constituents who are currently on the old formula expect to be transferred to the new formula at a relatively early date?

James Plaskitt: As my hon. Friend knows, because of the IT problems that have tended to plague the agency ever since its inception, transfer from one funding regime to another has not been possible to achieve. As we move towards the introduction of the new commission to replace the existing agency, we have set out that movement towards an integrated maintenance calculation will begin in 2010.

Graham Stuart: The Secretary of State knows that the Conservative party is committed to the eradication of child poverty by 2020, yet he claims that it is not. The Secretary of State knows that the Government will not meet their child poverty target in 2010, yet he maintained in the House today that it will be met. I put it to him that, as an internal document from the Department for Work and Pensions, published in February this year, says:
	"Despite effective policies these targets are unlikely to be fully met".
	Will the Secretary of State come clean today and tell the House the truth—that the targets will not be met on current policies?

James Purnell: If the hon. Gentleman read his documents more carefully, he would know that that was before the Budget, which announced an extra £1 billion, which Conservative Members voted against. If he also read his own party's documents, he would know that the Conservatives are not committed to ending child poverty; they talk vaguely about an aspiration, but have no policy to deliver it. They have tried to say that they will find more money from the working tax credit, but that was going to come from £3 billion of welfare savings, which are no longer there. The Conservatives now need to come clean and admit that they have no policy on child policy and that they would make no difference to it.

Christine Russell: My right hon. Friend the Secretary of State will be aware that family support workers who work out of children's centres, alongside community midwives, health visitors, nursery staff and so on, do an excellent job in reaching out to those families who have often been beyond the reach of traditional services. They also do an excellent job in helping lone parents to get back into training and work. Will my right hon. Friend give an assurance that his Department will support the retention of family support workers in children's centres, unlike the Conservative party, which wants to get rid of them?

James Purnell: I can give my hon. Friend that assurance, and I can go further: she will be glad to know that we will ensure that we pilot the use of Jobcentre Plus advisers working in children's centres, so that when parents take their children to get support there, they also discover how they can find opportunities to work. So we are making sure that we have both health and children's services working hand in glove with the services from the Department for Work and Pensions and from Jobcentre Plus.

David Heath: The Minister was talking earlier about getting people on the blind and partially sighted register back to work. Does he accept that it is actually far better and more cost-effective to keep people, particularly those with degenerative eye diseases, in work while they are still capable of working, rather than their losing their jobs? That needs support and the provision of adaptations. Is that a priority for the Department?

Anne McGuire: I have discussed the issues that the hon. Gentleman raises with the organisations that represent blind and visually impaired people. He is quite right to suggest that one of the issues that we need to consider is how we maintain people in employment when their vision is deteriorating, as it does for many working people. He can be assured that we are working to ensure that people are maintained in employment for as long as possible, because one of the major issues that we face is that, if people drop out of employment, it is far more difficult for them to move back into it.

Ronnie Campbell: When the Minister tries to get people back to work, which he is undoubtedly trying to do, will he take it a little bit easy on the older members of our society, such as miners and shipyard workers who are about the age of 60 who have most probably worked all their life in hard industry and are crippled with arthritis? One of my constituents is being chased to go back to work, and he is 61. I think that it is a bit much.

James Purnell: Of course we want to provide more support for those who are in greatest need. My hon. Friend may have seen that we announced last week that we will provide extra support for people who are the poorest and most disabled. People who are in the support group of the employment and support allowance will be an extra £16 a week better off. That shows that our reforms are about two things: helping people who can work back into work and providing more support for those who need more help.

Greg Clark: Can the Secretary of State say why the number of people in severe poverty—5.2 million—is the highest that it has been in 27 years?

James Purnell: The hon. Gentleman keeps banging on about those figures, but he knows perfectly well that the Office for National Statistics has said that they are not reliable because the sample is too small. It is interesting to hear him talking in today's questions, because I believe that, last week, he told  The Guardian—his favourite paper—

Mr. Speaker: Order. I must stop the Secretary of State. It is for him to give an account of his stewardship, not to talk about an hon. Member speaking to  The Guardian.

David Taylor: Further to the earlier question from my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) about employers encouraging older people in the workplace, one in four of UK adults are, like me, over the age of 60; will the Minister say whether he believes that each tier of our right hon. Friend's Government is adequately represented in that regard? Will he urge the Prime Minister to ensure that the special contribution of the over-60s is better reflected in future reshuffles?

Mike O'Brien: Good question. I am sure that I can pass on my hon. Friend's observations to the Prime Minister.

Robert Goodwill: Will the Minister comment on grants of up to £3,000 to purchase vehicles being made available to foreign nationals working in the UK?

James Purnell: I am very happy to make inquiries into that matter. Obviously, we have a Motability scheme to support disabled people to drive. I do not think the matter the hon. Gentleman raises is one for my Department, but if he writes to me, I will be happy to look into it.

Mark Hendrick: Will the Minister for Pensions Reform tell us how much better off pensioners are under this Government?

Mike O'Brien: There is a bit of a difficulty for the following reason. We have been quoting figures that the average pensioner household will be £1,500, or £29 a week, better off, but last week the Conservative party published its own document, which is well worth looking at—

Mr. Speaker: Order.

Henry Bellingham: Further to the question by my hon. Friend the Member for Tunbridge Wells (Greg Clark), the living in poverty figure is 5.2 million—that is an Office for National Statistics figure. Will the Secretary of State now answer my hon. Friend's question, because he has passed the buck a number of times today?

James Purnell: Child poverty is down by 600,000, and pensioner poverty is down by more than 1 million. That is in contrast to the record of the Conservative Government, under whom both went up.

Anne Begg: Last week, the Secretary of State made an announcement about the employment and support allowance. Will he tell the House how important that allowance will be, in giving both support to those who cannot work and help to those who can work?

James Purnell: That is exactly right. It will mean £16 more for the most disabled people. They will not be required to work, but as a consequence of the benefit changes we are introducing they will have much more support to get back into work, and much more income as well.

Heathrow Terminal 5

Theresa Villiers: : To ask the Secretary of State for Transport to make a statement on the problems occurring for passengers at Heathrow terminal 5 and the security measures in place at the terminal.

Jim Fitzpatrick: I thank the hon. Member for Chipping Barnet (Mrs. Villiers) for providing the opportunity to make a statement on the problems occurring for passengers at Heathrow's terminal 5. The Secretary of State sends her apologies for being unable to respond to the question herself, but she is on a pre-arranged regional visit; I believe that the hon. Lady and the hon. Member for Lewes (Norman Baker) are aware of that.
	Heathrow's new terminal 5 opened to the public on Thursday 27 March. The terminal is operated by BAA plc, but British Airways is the sole airline using it. On 27 March, BA moved to T5 the majority of its short haul operations, which accounts for about 400 flights per day and some 34,000 passengers.
	The management of terminal 5 is an operational matter for British Airways and BAA, but that does not mean that the Government are not taking a keen interest in seeing that the difficulties T5 has faced since it opened last week are addressed and resolved as quickly as possible. On its first day in operation, T5's bespoke baggage system was affected by a number of issues. First, there were technical software problems, but more significantly BA's challenge was integrating teams of staff, and it has been addressing this as a priority.
	After 27 March, the baggage system became clogged as more bags were checked in than were being placed on aircraft. On a number of occasions, the system stopped functioning, which led to planes taking off without some or all of their luggage. BA has had to cancel short haul flights to ease the pressure on the baggage system. By the end of the weekend, some 28,000 bags had been placed in temporary storage. BA drafted in 400 volunteers over the weekend to help sort those bags and estimates that it will take up to a week to get them back to their owners.
	The issue is mainly a problem for departing passengers. BA has advised that the incoming arrival bag times have been coming down steadily over the past few days and the average first bag time is now seven to eight minutes. That is as good, if not better, than for other Heathrow terminals.
	As the Secretary of State has made clear, we expect BA and BAA to work together to ensure that solutions are found and that there is as little disruption as possible to passengers. Department for Transport officials have been in touch with BA and BAA at a senior level throughout. The Secretary of State spoke to the chief executive of BA, Mr. Willie Walsh, and to Mr. Colin Matthews, chief executive of BAA, on Saturday, and I visited the airport on Sunday to see the situation at first hand.
	We have also been assisting BA, where appropriate given the necessity of maintaining effective security, in optimising all its security screening options, to help it tackle the backlog of bags that have yet to be reunited with their owners.
	As our discussion document "Towards a Sustainable Transport System", published last October, makes clear, we want a much greater emphasis on the needs of transport users. Passengers should expect airline and airport operators to deliver a good standard of service; so, although we recognise the considerable challenges in opening a major new terminal, we agree that it is extremely regrettable to say the least that passengers using T5 have had to suffer an unacceptably poor travel experience. Although I am convinced that T5 will ultimately prove to be a significant benefit to the passenger, there is no denying that delivery so far has fallen well short of expectations. What struck me on Sunday was just how devastated individual staff members were, from chief executives through to staff on the shop floor, that this had gone badly wrong. They were working hard to restore their own pride, as well as that of the operation, as was shown by, among other things, the number of volunteers who were helping.
	The important thing now is to put things right. BA's and BAA's focus must not be deflected from resolving the problems affecting T5 and ensuring that the passenger experience improves significantly as a matter of urgency. That includes ensuring that those passengers who have been affected by disruption receive, at the very least, the assistance and compensation to which they are legally entitled. It is in both BA's and BAA's interests to work effectively together to deliver the necessary improvement. The travelling public are not mainly interested in who is to blame for which particular failing, but rather in being treated properly when things go wrong and in seeing real progress towards the high standards of customer service to which both BA and BAA aspire. Once T5 is on track, we will press both operators to identify the lessons learned and to explain their plans for ensuring that good service standards are not only delivered but maintained.
	Before concluding, I must comment on security at T5. As one would expect, I am unable to go into detail on the specifics of issues raised in the last few days, but I would like to reassure the House that the Government enforce a sophisticated airport security regime, which delivers many layers of protection to the travelling public. The Department works closely with airport operators to ensure that standards are met, and officials have worked particularly intensively at Heathrow in recent weeks, given the opening of T5. That is normal in respect of security when a new terminal comes on line and helps to identify any areas that require improvement. The Department then works with the operator to ensure that swift action is taken to ensure that appropriate mitigation is in place. The process has been no different with T5. Let me assure you, and the House, Mr. Speaker, that aviation security is of the highest priority for the Government.
	In conclusion, we accept the reality of the problems facing passengers using T5, we are monitoring the situation very closely to encourage BA and BAA to address the issues and we stand ready to assist in any way if it is appropriate to do so.

Theresa Villiers: Thank you, Mr. Speaker, for allowing this urgent question.
	Since terminal 5 opened for business in the early hours of Thursday morning hundreds of flights have been cancelled, thousands of bags have been delayed or have gone missing, and thousands of passengers have suffered severe inconvenience and frustration. Both BA and BAA have let down their customers badly and, yet again, the state of Heathrow is a national embarrassment.
	Even more worryingly, yesterday's newspapers reported that Department for Transport inspectors had managed to bypass security checks on nine occasions during trials of the terminal's new systems and that the terminal's alarm system was not working properly. Will the Minister tell us what tests were carried out in relation to T5's security systems in advance of the opening? Will he give us the results, including details on the number of times inspectors were able to bypass security checks? What steps were taken to remedy the problems revealed by the tests carried out? Were the tests re-run and, if so, what was the result? Is it true that the fingerprint checks were dropped shortly before the terminal's opening to switch to a photographic recognition system? It is hard to believe that there would have been enough time to test that system appropriately in the short time available.
	The Secretary of State said of T5 that "this building exhausts superlatives." At the launch, she said:
	"Terminal 5 is a bold statement of intent for Heathrow's future."
	She continued:
	"It sends out a message that together we are working to make Heathrow a world-class airport again."
	Given the impact of the project on our image overseas, to what extent did she or the Minister challenge BAA and BA about the adequacy of their preparations before the opening of T5? Did the Secretary of State or her officials scrutinise the plans that those two companies had for the first week of operation of such a crucial project for our national interest? How confident is the Minister that the problems will be resolved by the time terminal 4 flights switch to the new terminal? Is he confident that BA and BAA have kept passengers adequately informed during the crisis and given the best advice on the right compensation? Is he sufficiently confident that BAA's renovation of Heathrow's other terminals will be completed on time? What steps are being taken to ensure that the problems of the past week will not recur when the terminals reopen?
	What steps are being taken to ensure that BAA and BA plan properly for the huge influx of passengers during the 2012 Olympics? A repeat of the fiasco of the last few days would be a disaster for the 2012 games and would leave the country a laughing stock around the world. Surely a company faced with real competition would be less likely to make basic and complacent mistakes such as leaving staff without an overflow car park facility on the most important day for Heathrow for a decade.
	Does the Minister agree that the calamitous events of the past few days have strengthened the case for breaking up BAA's monopolistic grip on airport capacity in the south-east? Does he agree that the time has come for the Competition Commission to proceed with the break-up? Finally, will the events of the past few days give the Government any cause to reconsider whether BAA is capable of managing the project to construct the third runway and sixth terminal that the Government are dead-set on building regardless of whether crucial environmental questions are answered or not?
	How can the Minister or the Secretary of State possibly hold BAA to account effectively on all the critical questions that I have asked? How can they get tough on BAA's performance on T5 when the Department has actively colluded with the company to fiddle the figures on Heathrow expansion? The cosy relationship between the Labour establishment and BAA on a third runway is notorious and means that the Government cannot possibly be objective in judging BAA's lamentable performance during the opening of terminal 5.

Jim Fitzpatrick: The hon. Lady has asked a series of questions and I shall try to respond to as many as I can. First, I rebut the allegation of collusion. The consultation that the Department recently concluded in respect of the expansion of Heathrow was based on the 2003 White Paper that followed years of examination of whether we could meet the strict environmental standards that we laid down on noise, emissions and access. We were confident that those standards could be met and that is contained in the consultation documentation—the matter is out for consultation. Of course, the hon. Lady will have the opportunity to discuss the issues on Wednesday afternoon, when the Liberal Democrats have a half-day Opposition debate on Heathrow. I suspect that we will deal with the issues in more detail then.
	Fingerprint checks were not dropped as a matter of security, but there were questions about the system's efficacy and BAA decided not to proceed with it at that time. That was not a matter for the Department for Transport or for TRANSEC. We had no reason to believe that the plans for T5 would not work. The building—I believe that we all monitored its progress over recent years—is an exemplary, of British engineering, architecture and construction. It is a magnificent structure. Officials of the Department for Transport, BAA and BA are always in regular contact and we had no reason to believe that it would not work. We were confident about that and we were sure that the terminal would operate effectively.
	This has been a great disappointment. As the hon. Lady said, national pride has been dented. Her Majesty opened T5 to national fanfare and delight in early March. The following week, when the A380 arrived for its first flight, many of us believed that Heathrow had turned a corner and that the bad publicity of recent years would turn into positive publicity, notwithstanding the importance of scrutiny as regards the expansion. Clearly, that was not the case.
	The hon. Lady asked about compensation. The European Union's denied boarding and cancellation regulations set out an airline's responsibilities to passengers in the event of long delays on departure or the cancellation of flights. It is the responsibility of British Airways to comply with that regulation with regard to the delays and cancellations experienced at terminal 5 in the past few days. From our discussions with the airline, it is clear that it is aware of its responsibilities under those regulations, and is endeavouring to comply with them. The Civil Aviation Authority is monitoring the situation to ensure that that happens.
	The 2012 Olympics will be a matter of great national pride. We are very confident that we will be able to deliver the Olympics as outlined, on time, and we have no reason to believe that that will not be the case. Incidents such as T5 serve only to reinforce our resolve to ensure that we redouble our efforts and that the 2012 Olympics are a huge success.
	I believe that ultimately, and within a short period, terminal 5 will be a source of great national pride. It is a magnificent building; the services within it are top of the range in terms of passenger experience, and we believe that BA and BAA will be able to show that off to the world in very short order.

John McDonnell: Will the Minister join me in congratulating my constituents who work at Heathrow, who, despite the job cuts in recent years and despite BAA trying to attack their pension fund before Christmas, nevertheless loyally turned out in large numbers, many of them volunteers, to help the travelling public? May I ask him to start thinking again about the future expansion of Heathrow, given the grotesque incompetence of BAA in managing the terminal 5 project in recent weeks and given that all the Government's policies have been based upon the advice of BAA?

Jim Fitzpatrick: I am very happy to acknowledge the role of all those working at Heathrow, who have tried to put the situation right. As I said earlier, one thing that struck me in speaking to staff members at all levels within BA and BAA was the damage to their self-esteem, and the fact that they were taking it personally that the systems had failed them. They were working extremely hard to try to correct the situation, as was evidenced by the number who volunteered to come in and do so.
	The role of BAA in the consultation exercise was that it advised and supplied information. We set out in the 2003 White Paper that, for the economic interests of UK plc, we needed to increase the capacity at Heathrow, and that BAA had a role to play in that exercise. We did not accept all that it sent us without checking it. We have our own experts and officials in the Department who ensured that what BAA supplied was double-checked and that the evidence that we produced in the consultation exercise was Department for Transport information, not BAA information.
	On BAA and its competence, I believe that we all know that the Competition Commission is to report on the operation of BAA in 2009. It would not be appropriate for me to comment on that matter at this point.

Norman Baker: The events of the past few days represent a disgraceful inconvenience to passengers, reflect extremely badly on BA and BAA and are a national disgrace. I notice that the terminal 5 website still shows BA's chief executive, Willie Walsh, describing it as
	"an extremely sophisticated baggage system with a terminal built around it."
	It reminds me rather more of the legendary sign at Oslo airport, which says:
	"We take your luggage and send it in all directions."
	How could the new terminal open with cancelled flights, parking problems, staff shortages and non-functioning escalators on day one? Will the Minister contrast that fiasco with the smooth opening of St. Pancras International, and perhaps conclude that members of the public, when they can, might be better taking the train, particularly given the lower carbon emissions associated with rail?
	The Minister mentioned compensation. Is he aware that the CAA has indicated that it believes that British Airways has breached EU legislation on passengers' rights by limiting compensation and expenses? What action will he take to ensure that BA provides its passengers with the compensation to which they are entitled as soon as possible?
	What guarantee can the Minister give us that when there is a big surge in people wishing to travel by air this weekend, with the school holidays coming up, people will not be subject to cancelled flights, long delays and lost baggage at terminal 5?
	On security, how did BAA and the Government get themselves into a position where their plans to implement the fingerprinting of passengers were criticised by the Information Commissioner and had to be withdrawn at short notice? Why were they not checked in advance? Will the Government ensure that we have good security at Heathrow without resorting to the type of police state measures that some of the Minister's colleagues are all too keen on?
	Finally, does this not show that the Government are wrong to accept the word of BAA and BA and their assurances when it comes to major infrastructure projects of national importance? Will the Government learn that lesson and commission independent research into the proposals for a third runway rather than relying on BAA to write their consultation paper for them?

Jim Fitzpatrick: In my past few answers I tried to rebut the allegation that BAA wrote our consultation document for us. That is patently not the case; it is a Department for Transport document and we stand by that. I hear what the hon. Gentleman says about the British Airways website. I am sure the company heard it too and is no doubt correcting the website at the moment. I shall not criticise BA for that being the last thing it is paying attention to, because the company is trying to make sure that the operation at T5 is corrected and improved to serve passengers. That is where the focus ought to be.
	I believe I answered the point about compensation; the CAA is monitoring the situation and British Airways is clearly aware of its responsibilities under the EU's denied boarding and cancellation regulations and is endeavouring to comply with them. Obviously, members of the public will be able to check on various websites for advice on how best to proceed.
	On the hon. Gentleman's advice that people choose rail rather than air, we see rail as a major success story for the country. The Government are investing £88 million a week in rail travel, as we know. The public make their own decisions, and as rail operation has improved respective percentages for Manchester to London travel via rail or air have been reversed. However, that does not obviate the need for air travel to different parts of the world, or indeed different parts of the country, if necessity arises.
	We are disappointed about what is happening at the moment, but we are confident that ultimately terminal 5 will be a massive addition to Heathrow and a matter of national pride. We all acknowledge that it is not there yet, but people are working hard to try to make sure that it is as quickly as possible.

Gwyneth Dunwoody: While I sympathise with Her Majesty's Government's efforts to get those two private companies to run their businesses efficiently, is it not true that in fact the United Kingdom's reputation suffers from such a major fiasco? Will the Minister press both BAA and BA to answer some simple questions? How much training was given to baggage handlers? What facilities were available for people to get to work efficiently and on time? What is the real timetable for putting things back into operation after these disasters? If we do not have the answers to those questions soon, not only will the problem continue but it will continue to make Heathrow a disaster area.

Jim Fitzpatrick: My hon. Friend, who as we all know chairs the Select Committee on Transport and is held in high regard throughout the whole House, identifies the fact that damage to Heathrow is damage to UK plc. That is the very reason why we support expansion at Heathrow; running at 98.5 to 99 per cent. capacity it does not serve the UK as well as it should. Without expansion the UK will continue to suffer and that will affect our economic ability to compete on the world stage.
	My hon. Friend raises absolutely appropriate points in respect of analysis and a post-mortem into what went wrong. As I said in my original remarks, the priority at present is for BA and BAA to continue to work hard to correct what has gone wrong, but we shall want to see the lessons, to know why things went wrong in the first place so that we can be assured for the future. I know that my hon. Friend and her Committee will take a keen interest in these matters, and we will share as much information as possible with her as it arrives.

John Randall: The Minister did not answer the questions asked by my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) about security, which, of course, is a Government responsibility. Will he confirm that his officials were able to bypass security at terminal 5 on a number of occasions? What weaknesses did they discover, what has been done about it, and were they tested again?

Jim Fitzpatrick: I apologise to the hon. Lady for not responding to that specific point. I tried to note down her questions, and I accept that I missed that one.
	There have been reports of weaknesses in the security system, which were identified beforehand. I can assure the House, notwithstanding the fact that I am not likely to go into the detail of security arrangements from the Dispatch Box, that TRANSEC and the Department would not have given the green light to T5 to open if we were not satisfied that the security arrangements in place on 27 March were adequate to protect members of the public. We are proud of the security and protection that we afford the travelling public, and those issues that were identified as requiring attention were either addressed or being addressed, but they were not a reason not to proceed with the opening.

Claire Curtis-Thomas: My hon. Friend will be aware that Heathrow is the busiest international airport in the world bar none, and that that project constitutes a £4.2 billion investment. I stand to defend my engineering colleagues involved in the project: they have done an outstanding job, and we draw on the best in the world. I accept the inconvenience that the problem has caused passengers, but does my hon. Friend accept my point, on behalf of the industry that I am proud to represent, that this is a teething problem that will pass? Lessons will be learned, and the technology that we have developed in relation to Heathrow will be sold to other parts of the world, which regard T5 as a major flagship project for avionics.

Jim Fitzpatrick: My hon. Friend's professional background and expertise are well known in the House. I fully agree with her enthusiasm and confidence that these are teething problems but, none the less, they are serious for those individuals who have been delayed, whose flights have been cancelled, and who have lost their luggage. Notwithstanding the confidence of BA and BAA that they can sort the matter out given time, those problems ought not to have arisen, so they are trying to address them as quickly as possible.
	I certainly hope that what we all believed and expected to be the case will come to pass, and that T5 will be the jewel in Heathrow's crown. T3's frontage and reception area have improved beyond recognition while this has been going on, and there is a new Virgin reception area, too. There have already been improvements at Heathrow, and they continue to be made. What happened in the past week is disappointing, but everyone is working hard to make sure that it is corrected as quickly as possible.

Alistair Carmichael: May I, too, pay tribute to the front-line BA staff whom I saw at Heathrow terminal 5 on Thursday? They were operating in exceptionally difficult circumstances, with little information and absolutely no sign of any senior management at that stage. Staff demoralisation is nothing new—it has been happening for years—and last week's shambles was just a consequence of that.
	Will the Minister impress on BA the fact that there is tremendous frustration, particularly in Scotland, that every time BA gets it wrong, it is always the domestic services, especially those to Glasgow, Edinburgh and Aberdeen that are cut first? That is bad for Scotland, it is unfair treatment for Scottish passengers, and it must not be allowed to continue.

Jim Fitzpatrick: The hon. Gentleman outlines the fact that the situation is unacceptable both generally and to his constituents in particular, and I fully agree I have said repeatedly in the past 27 minutes that we are doing everything we can to assist and ensure that the situation is rectified. I would quibble with him, however, over one small point. Notwithstanding the efforts and endeavours of front-line staff, to whom I paid tribute, both when I replied to my hon. Friend the Member for Hayes and Harlington (John McDonnell) and in my opening remarks, senior managers are working hard. When I was at Heathrow, I met Colin Matthews, Gareth Kirkwood and Mark Bullock, who had been working extended hours with ordinary staff members. They are responsible—they are the management—and were expected to be there, but they were working shoulder to shoulder with their colleagues, including volunteers, doing everything they could to put the situation right. I have no reason to doubt that that stretches through all levels and ranks in the organisations.

Anne Begg: I was there last Thursday, and I think we should get a badge saying, "I survived T5". Unlike the hon. Member for Orkney and Shetland (Mr. Carmichael), I, luckily, managed to get on a plane and take off. It was delayed by only an hour and a half, and I now realise how lucky we were. Notwithstanding all the problems with the baggage, there were other problems last Thursday, and I hope my hon. Friend will look into them. I must have been the first wheelchair passenger to enter the lift that takes passengers from to the gate down to the side of the plane. I know that I must have been the first, because when I asked the wheelchair services lady who came to pick me up where we had to go, she replied, "How would I know? This is the first time I've ever been here and you're my first job." That lift did not work, so we had to find another. There are obviously problems across the whole terminal that need to be looked into. I hope my hon. Friend will get it sorted. We had great hopes that terminal 5 would sort some of the problems that we have been facing from British Airways. That is why we are so disappointed and upset about what happened last Thursday.

Jim Fitzpatrick: I am disappointed to hear of my hon. Friend's experience. A great deal of effort has gone in from the Department, BA and BAA to deal with mobility issues and to address the challenges that will be faced by people who have disabilities. To hear that there was a lack of preparedness is extremely disappointing, and I will make sure that I communicate that personally to the appropriate senior management.

Justine Greening: Does the Minister accept that the shambles at terminal 5 raises serious questions over the further expansion of Heathrow? The issues that have been raised by Members across the House are ones that can be fixed, but they highlight wholesale problems—not just with the baggage system, but with lifts, the car parking system and a range of other things. What if BAA has got its calculations wrong not just about lifts, but about air pollution, public health or congestion? Those cannot be fixed by expanding the airport. Will the Minister assure the House that he will look at the post mortem and pause to consider whether he should plough ahead with the expansion and carry on regardless?

Jim Fitzpatrick: As I said, I am sure that we will look at the issues in depth on Wednesday, although that does not in any way make the hon. Lady's question anything other than appropriate. I assure her that any information that was fed to us was checked by the Department. As I have said on several occasions today and previously, the documentation that was published by the Department for Transport as part of its consultation exercise is our documentation; we stand by the figures that we have published.
	We fully recognise that the experience at T5 over the past few days does nothing to inspire confidence in the aviation sector, and we will have to work very hard to repair the credibility and the damage. However, as I have also said, the expansion of Heathrow is of fundamental importance to the economy of the United Kingdom. We believe that we have demonstrated that. It must take place and we have demonstrated how it can take place with the environmental protections that we have laid down in respect of emissions, access and noise. We are confident that, when we analyse the consultation—which, as the hon. Lady knows, is being undertaken at present—and publish our findings in the summer, our validation will be proved to be correct.

Eric Joyce: I was one of a number of Scottish colleagues who had the privilege of looking at the interior architecture of terminal 5 last Thursday. Once we had finished doing that, we did it again, because there was plenty of time. Does my hon. Friend agree that that shows how terminal 5, when it is fully functioning, is a vital economic asset to the whole of the UK—Scotland, Wales, Ireland and England, including London?

Jim Fitzpatrick: I am grateful that my hon. Friend admired what he saw last week, perhaps at greater length than he had anticipated. I, sadly, missed the official opening over which Her Majesty presided, as I was here, waiting to debate the private Member's Bill promoted by the hon. Member for Putney (Justine Greening), but we did not get that opportunity. Sunday was the first chance that I had to see T5 open and completed since I went to see it when it was still a bit of a building site some three months ago. My hon. Friend is right; it is a magnificent building. As my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) and others said earlier, it is a feat of engineering. It ought to be something of which we are extremely proud. I am sure that we will be proud of it in due course, although, sadly, we are not able to express that admiration at present.

Stewart Hosie: Fortunately, I fly to Dundee from London City airport, and I am truly grateful for that. However, I understand that one in six of all air journeys from Scotland—more than 3 million passenger journeys a year—go to Heathrow. It is a vital business gateway. I am sure that the Minister has the quotes from the business community immediately when the chaos happened. The Federation of Small Businesses Scotland said:
	"It is an open secret that flights to and from Scotland are the first to be scrapped in order to clear the backlog".
	The Scottish Chambers of Commerce added:
	"It seems once again that services to and from Scotland are suffering disproportionately."
	These things happen from time to time, so will the Minister make representations to BA and BAA that, should events such as these occur again, essential business services to Scotland from whatever airport will not be disproportionately affected in favour of other flights?

Jim Fitzpatrick: I should declare an interest; as the hon. Gentleman knows, London City airport is in my constituency. I am pleased that he was using it and I hope that he enjoyed the experience.
	The question of flights and routes from Scotland to London airports is raised fairly regularly by hon. Members on the Government Benches, as well as by Opposition Members. I know how important those routes are, particularly to the business community in Scotland. Obviously, they are a matter for commercial decision, although there are some protected routes by virtue of criteria that are laid down. We will always listen to representations when concerns are raised, and the hon. Gentleman has stated that of which we are all aware.

Several hon. Members: rose —

Mr. Speaker: Bob Neill— [Interruption.] Brian Binley.

Brian Binley: You are very kind, Mr. Speaker. I am grateful, although slightly bemused—but thank you.
	Last year, I raised this very issue with the Prime Minister. I said that it was absolutely necessary to cut delays at our national airports, particularly at Heathrow.

Jim Fitzpatrick: indicated assent.

Brian Binley: I see the Minister nodding, and I am grateful that he remembers that occasion. The Prime Minister said that he would take on board all the points that I made. In particular, he said that he would pass on to BAA his
	"desire for proper staffing at Heathrow to make it easier and more convenient for people to undertake their journeys."—[ Official Report, 14 November 2007; Vol. 467, c. 686.]
	How was the promise kept? Why did it have so little effect? Will the Minister assure me that he will now get involved, on a detailed and regular basis, to stop this immensely harmful incident from doing any more damage to Britain's industrial and commercial interests?

Jim Fitzpatrick: Like everybody else in the House, the hon. Gentleman knows that the Prime Minister is a man of his word. That promise would have been kept by the PM; I am sorry that I have not spoken to him directly about it. However, I assure the hon. Gentleman that the Prime Minister was no less disappointed than he or I at what unfolded at Heathrow last week and was no less embarrassed than those who were working at and operating Heathrow.
	The matter is of national significance and importance; as many right hon. and hon. Members have said, Heathrow is absolutely pivotal to the UK's economy. It is our major international hub and the gateway through which many of our business partners travel. If Heathrow is not functioning, the UK suffers. That is why we are committed to expanding at Heathrow; operating at 98.5 to 99 per cent. capacity is just untenable. I fully accept the hon. Gentleman's criticism. The Prime Minister is personally involved, to make sure that the matters are addressed as quickly as possible. Furthermore, as I outlined previously, my right hon. Friend the Secretary of State has also been involved.
	On the question of the Heathrow consultation, I should like to clarify that although, as I have said, we are confident of the analysis in the consultation document, no decisions have been made. The responses are being analysed and will inform final policy decisions. That is exactly what we have been saying since the consultation process started. The analysis is ongoing. We will report back to the House in due course, once the analysis has taken place. We hope to report by the summer, because Heathrow is far too important to Britain.

Doug Henderson: I have listened to my hon. Friend's responses to the points raised by Members from Scottish constituencies, but there is a more serious issue in relation to some of the northern English airports. There is no competition between Newcastle and Heathrow. Air travel is vital for the economy nationally and even more vital for our regional economy. Can we have some competition, or better regulation, to ensure that flights between Heathrow and Newcastle are not disproportionately affected? At the moment, any time there is a problem, as with Aberdeen, Edinburgh, Glasgow and, sometimes, Manchester, Newcastle flights are cancelled or badly delayed.

Jim Fitzpatrick: I can only sympathise with the points raised by my hon. Friend. I do not think that I can add to what I said to the hon. Member for Dundee, East (Stewart Hosie). I understand and I am sensitive to the position, and I fully empathise, but these are operational matters, and airlines and airport operators obviously need to take account of customers' feelings when problems arise.

Susan Kramer: I wonder whether the Minister recognises that the shambolic opening of T5 is just the latest in a series of operational mismanagement experiences from BAA and BA and other members of the aviation industry. In the past, they have used the excuse that lack of runway capacity has caused trouble at Heathrow. Does he recognise that it is time to be less gullible and not to take those statements, or the information that has been provided to him by the industry, at face value, and to understand that that is not the cause of the problem and that the whole expansion project needs to be thought through again?

Jim Fitzpatrick: I thought that Her Majesty performed a magnificent opening of T5 on 14 March. The terminal's going live last week was obviously a completely different occasion. I have tried to answer the points raised by the hon. Lady in respect of the information, data, evidence and science that we have published in the consultation documents. It is our information, and we stand by those publications. This is a matter not of being gullible but of trying to protect UK plc.

Anne McIntosh: The Minister will be aware that for transit passengers from the north of England and Scotland this whole scenario is an unmitigated disaster. I think that he said that 26,000 bags were still to be reconnected to their passengers. International legislation does not permit those bags to travel by passenger plane unless they are accompanied on the same flight by the passenger. How does he propose to get round the problem of reuniting the bags with the passengers?
	The Minister did not respond to the question about rolling out the next set of improvements with the closure of terminal 2. Passengers using terminal 2 will be filled with horror by the prospect of having to go through terminal 5 when that happens.
	I entirely endorse—

Mr. Speaker: Order. Only one supplementary is allowed; there are several there already.

Jim Fitzpatrick: The hon. Lady raises an appropriate point. There is an additional security complication by virtue of passengers having been separated from their bags. As I said in my opening remarks, arrangements are in place to ensure that those bags can be reunited with their owners at the location to which they have flown. I am afraid that I cannot go into further security detail as to how that is being accomplished, but I can assure her that it is being done.

Vincent Cable: Since BAA is in a financially precarious position following the acquisition by Ferrovial, what are the Government's responsibilities at Heathrow in the event that the situation should deteriorate further, leading to possible insolvency?

Jim Fitzpatrick: We are confident that Ferrovial and the investment in Heathrow is secure. We do not believe that it will go into insolvency or that there will be difficulty in its fulfilling the investment plans and the improvements to Heathrow to which it is committed.

Philip Hollobone: Is not what we have here, as with Network Rail and the disastrous overrunning of the new year engineering works, the inability of managers at middle and senior management levels to manage projects effectively? Given that the Government will not have a second chance with the Olympics, may we have a major Government inquiry into why project management skills for some of our flagship projects have proved so woefully inadequate?

Jim Fitzpatrick: The hon. Gentleman raises the obvious point that we need to identify why these situations happen, what went wrong, and how we can prevent such situations from happening in future. As I said to my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas), we will be asking for those lessons to be communicated to us, and we will discuss the matter with BA and BAA in due course. I am sure that, as always, the hon. Gentleman will take a keen interest in these matters.

Points of Order

Gerald Howarth: On a point of order, Mr. Speaker. I am conscious, as is the whole House, that you are extremely vigilant in seeking to protect the interests of the House to ensure that important announcements made by Ministers are made first to the House rather than to the media. This morning, the Ministry of Defence announced by way of a written ministerial statement that it has signed a contract with a consortium called AirTanker for the future strategic tanker aircraft. That contract was foreshadowed in 1997 as the largest private finance initiative the Ministry of Defence has produced, worth about £13,000 million.
	The MOD announced in February 2005 that it had selected AirTanker as the preferred bidder, yet it was only today that it issued a written ministerial statement. In fact, there was a press conference to tell the press all about the matter at 2 o'clock last Thursday. I wonder whether you could advise me on what I might do, Mr. Speaker. I learned that there was to be such a press conference at 1 o'clock when I was attending a conference organised by the Society of British Aerospace Companies. I asked my office to check with the Ministry of Defence, and the noble Baroness Taylor sent me a letter, in which she said:
	"Due to the rapid pace of the final stages in closing this complex commercial and financial deal, it has not been possible to follow the normal parliamentary protocols in making this announcement."
	However, the fact is that not only has this process been in gestation for 10 years, but the company concerned, Thales, produced a draft press release last Wednesday, in which there was a reference to the Secretary of State for Defence—

Mr. Speaker: Order. The hon. Gentleman has made his point of order. I strongly disapprove of press conferences on matters that should come to the House first. I can tell the hon. Gentleman that I am going to look into the matter; I take it very seriously. I shall get back to him and, of course, the House.

Gerald Howarth: Further to that point of order, Mr. Speaker. May I thank you very much for that? There will be occasions on which there are contractual difficulties, but in those circumstances Opposition spokesmen and others concerned ought to be advised by telephone—

Mr. Speaker: Order. In a sense, the hon. Gentleman should not push his luck. The Speaker is agreeing with him, and when the Speaker agrees with him, he should leave it at that.

Gerald Howarth: Thank you, Mr. Speaker.

Lembit �pik: On a point of order, Mr. Speaker. I believe that we are just about to move on to the housing legislation. I seek your guidance on what we might be able to do to extend the amount of time we have to debate it. Currently, given the limitations of time and the enormous number of amendments that have been submitted, we have 73 seconds per amendment. Is there anything that we can do to give the Government a kick so that we have enough time to ensure that the housing crisis is not compounded by a crisis of scrutiny of one of the most important pieces of housing legislation that we have ever discussed?

Mr. Speaker: I have a great deal of sympathy with the hon. Gentleman, but as he might know, certain things are within my powers, and certain things are outwith them. He should take up such matters with the usual channels. Housing is very important in my constituency, and I well understand how he feels.

Simon Hughes: I heard exactly what you said, Mr. Speaker, but further to the point raised by my hon. Friend the Member for Montgomeryshire (Lembit pik), you were in the Chair when the Leader of the House said twice that, when significant numbers of Government new clauses and amendments were put forward on Report, she would look at whether there could be injury time, as it were. She repeated that last Thursday. I think that I am right in saying that there are 18 Government new clauses and 18 Opposition new clauses, but more Government amendments than Opposition ones. Have you had any indication, Mr. Speaker, that the Leader of the House is willing to come back to the House today, and would you allow her to come back as soon as possible to make a statement about proposed changes so that we do not have such a nonsensical procedural mess again?

Mr. Speaker: The hon. Gentleman's complaints strengthen the case that I made. This is a matter for the House and for the Leader of the House. He should be taking it up with her. As far as statements are concerned, the Leader of the House is always welcome to come and make statements, but that is up to her.

Housing and Regeneration Bill  [Ways and Means]

Iain Wright: I beg to move,
	That, for the purposes of any Act resulting from the Housing and Regeneration Bill, it is expedient to authorise
	(1) provision about the fiscal consequences of transfer schemes, and
	(2) consequential amendment of fiscal legislation.
	The Bill abolishes three existing bodiesthe Commission for New Towns, the Urban Regeneration Agency and the Housing Corporationand transfers their responsibilities, liabilities and assets to two new bodies: the Homes and Communities Agency and the Office for Tenants and Social Landlords, or Oftenant. The two new bodies will operate only in England. Any existing functions and assets of the CNT in Wales will be transferred to Welsh Ministers.
	Clauses 53 and 67 and schedule 6, which we will discuss later, provide for schemes under which properties, rights and liabilities can be transferred. In any statutory reorganisation, a tax charge might arise on the transfer of assets and liabilities between the predecessor and successor bodies unless specific provision is made to the contrary. It is general Government policy that such transfers should be tax-neutralthe transfers should not give rise to a gain or a loss. The new bodies should be entitled to any tax reliefs and allowances that applied to their predecessors immediately before the change. The Government amendments make such provisions and ensure that the reorganisation of statutory functions can take place without unwanted tax consequences.
	The Government amendments also ensure continuity of trade, so that the Homes and Communities Agency and Oftenant are afforded the tax treatments that are currently provided to the Urban Regeneration Agency and the Housing Corporation. The ways and means motion authorises the relevant provision.

Lembit �pik: I do not disagree with the motion, but it is ironic that time is allocated for that one item but not so much for the rest of the Bill. How can we decide, given that we have not considered the detail of the Bill, some of which has a direct impact on what the Under-Secretary asks us to approve now? I seek reassurance from him that he is confident that we can get through all the amendments, because the Government are making massive changes to the content of the Bill and asking us to give financial approval before we have gone through it. Does he agree that approving the motion means, in a sense, putting the cart before the horse?

Iain Wright: The hon. Gentleman makes an important point, but I take issue with him on several matters. First, we are not fundamentally changing the nature and scope of the Bill, which is designed to improve the supply and quality of housing, linked with regeneration and community investment in England. It is also designed to ensure improved services for tenants.
	Let me set out my approach to the rest of our deliberations today. I intend to be as brief as possible

Mr. Speaker: Order. The Under-Secretary can do that when we move on to the Bill.
	 Question put and agreed to.

Orders of the Day

Housing and Regeneration Bill

As amended in the Public Bill Committee, considered.

New Clause 11
	  
	Possession orders relating to certain tenancies

'Schedule (Possession orders relating to certain tenancies) (which makes provision about possession orders and their effect on secure tenancies, assured tenancies, introductory tenancies and demoted tenancies including provision about the status of existing occupiers) has effect.'. [Mr. Iain Wright.]
	 Brought up, and read the First time.

Iain Wright: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to discuss the following:
	Government new clause 12 Shared ownership leases: protection for certain leases.
	Government new clause 13 Service charges: provision of information and designated accounts.
	New clause 1 Consultation principles
	'(1) The Secretary of State shall, by regulations made by statutory instrument, set out a code of practice to govern local authority consultations with tenants concerning
	(a) a change of landlord, or
	(b) a major change in the management of their homes.
	(2) Regulations made under subsection (1) shall require the local authority to
	(a) place in the public domain all relevant information as is necessary for them to influence or control the management of their accommodation and environment including the resources available to the authority to spend on its stock, stock conditions surveys, the business plan of the proposed landlord, the transfer valuation, details of any land and property to be disposed of, and any other information on which the Offer Document and transfer proposal is based,
	(b) ensure at the start of the consultation that all tenants are aware of their rights to access information as set out under paragraph (a),
	(c) ensure that material it produces is objective, balanced, informative and accurate,
	(d) provide the same level of resources for any tenant group who serves written notice on the authority opposing a proposal as that given to any tenant group making such a proposal so that they can put an alternative view to tenants,
	(e) not deny any reasonable request from any group under paragraph (d) for lists of addresses and access to notice boards, meeting facilities and other relevant resources to enable all parties to communicate with those entitled to vote,
	(f) give two months notice of
	(i) the start and end date of the ballot, and
	(ii) how those eligible will be able to vote, and
	(g) ensure that information regarding who has voted at any point in time is treated in confidence,
	(h) not exceed spending limits for these consultations as may be determined by the Secretary of State and certified as proper by the District Auditor.'.
	New clause 8 Subsidy arrangements: formula and exclusions
	'(1) In section 80 of the Local Government and Housing Act 1989 (c. 42) (calculation of Housing Revenue Account subsidy) after subsection (3) insert
	(3A) In determining a formula for the purposes of this section for any year, the Secretary of State shall take into account
	(a) the resources required properly to manage, maintain and repair houses and other properties within their respective Housing Revenue Accounts,
	(b) research into these matters, and
	(c) the resources required to enable respective authorities to acquire, rehabilitate and build new housing to be held within their Housing Revenue Accounts that contributes to meeting the need for affordable housing within their respective areas.'.
	New clause 9 Orders for possession
	'Section 7 (orders for possession) of the Housing Act 1988 (c. 50) is amended as follows
	(1) In subsection (3), at the beginning of the subsection, add Subject to subsection (3A).
	(2) After subsection (3), add the following subsection
	of the Housing and Regeneration Act 2008..
	(3) In subsection (3), for subsections (5A) and (6) substitute subsections (5A), (6) and (6A).
	(4) In subsection (4), for subsections (5A) and (6) substitute subsections (5A), (6) and (6A).
	(5) After subsection (6), insert
	(6A) If the court is satisfied
	(a) that Ground 8 in Part 1 of Schedule 2 to this Act is established; and
	(b) that some rent is in arrears as a consequence of a delay or failure in the payment of relevant housing benefit, it shall not make an order for possession unless it considers it reasonable to do so..
	(6) At end insert
	(8) In subsection (6A) above
	(a) relevant housing benefit means
	(i) any rent allowance or rent rebate to which the tenant was entitled in respect of the rent under the Housing Benefit Regulations 2006 (S.I. 2006/213); or
	(ii) any payment on account of any such entitlement awarded under Regulation 93 of those Regulations;
	(b) references to delay or failure in the payment of relevant housing benefit do not include such delay or failure so far as referable to any wilful act or omission of the tenant.'.
	New clause 29 Sinking funds
	'(1) The Secretary of State must, within 12 months of the date on which this Act is passed, make regulations regarding the terms of leases granted by local authorities for residential properties.
	(2) The regulations made under subsection (1) shall provide that all leases granted by local authorities for residential properties shall be deemed to include provision for tenants to make contributions to a sinking fund to be used to finance any proposed works in relation to tenants' properties.
	(3) Regulations made by the Secretary of State under this section shall be made by statutory instrument.
	(4) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.'.
	New clause 31 Involvement of tenants in decisions on works
	'(1) The Landlord and Tenant Act 1985 (c. 70) is amended as follows.
	(2) In section 20ZA (consultation requirements: supplementary), for subsection (5) substitute
	(5) Regulations under subsection (4) shall include provision
	(a) requiring the landlord to give reasons in prescribed circumstances for carrying out works;
	(b) requiring the landlord to provide details of proposed works, including estimates of costs, to tenants or the recognised tenants' association representing them;
	(c) requiring the landlord to invite residential tenants or the recognised tenants' association to propose the names of persons from whom the landlord should try to obtain other estimates;
	(d) requiring the landlord to consult those tenants affected by the proposed works on
	(i) the specifications for any tenders issued in respect of the proposed works, and
	(ii) all tenders received in respect of the proposed works;
	(e) to enable tenants or the recognised tenants' association to submit, within a specified period of time, a counter proposal in respect of proposed works, specifying alternative provision of the proposed works;
	(f) requiring the landlord to
	(i) have regard to any observations made by tenants or the recognised tenants' association in relation to the proposed works,
	(ii) hold a ballot of the tenants directly affected by the proposed works on any counter-proposal that is supported by 25 per cent. or more of those tenants directly affected by the proposed works, and
	(iii) adopt the counter-proposal if it is supported by a majority of tenants directly affected by the proposed works in the ballot;
	(g) requiring the landlord to make available for inspection by the public at reasonable times and for a period of 10 years from initial publication
	(i) details of any proposed works and any responses to consultations on such works,
	(ii) any counter-proposals that are supported by more than 25 per cent. of tenants directly affected by the proposed works, and
	(iii) any requests to a residential property tribunal service for adjudication and details of the consequent decisions;
	(h) in cases of dispute, for a leasehold valuation tribunal or other independent arbitration tribunal to make a determination in respect of proposed works or agreements upon application by a landlord, residential tenant or the recognised tenants association..
	(3) In section 19 (limitation of service charges: reasonableness), after subsection (3) insert
	(3A) If the relevant contribution of any residential tenant in any 12 months period exceeds 12,000, arrangements must be made by the landlord for such tenants to pay that contribution in monthly instalments not exceeding 250 for that period..'.
	Amendment No. 5, page 113, line 14, in clause 280, leave out from 'ballot' to 'or' in line 15 and insert
	'in accordance with the code of practice set out in section (Consultation principles);'.
	Amendment No. 145, page 114, line 7, in clause 281, at end add
	'(4) Section 105 of the Housing Act 1985 (consultation on matters of housing management) is amended as follows.
	(5) In subsection (2), after paragraph (b) insert
	(ba) a proposed measure or policy relating to the matters specified in paragraphs (a) and (b) about which the Secretary of State has published a consultation document to which the landlord authority intends to make a written response.'.
	Government amendments Nos. 31 to 41.
	Amendment No. 14, page 122, line 38, in clause 290, after 'the', insert 'earlier of
	(a) the'.
	Government amendment No. 42.
	Amendment No. 15, page 122, at end insert '; or
	(b) the completion of the sale'.
	Government amendments Nos. 43 to 50.
	Government new schedule 2 'Possession orders relating to certain tenancies.
	Government new schedule 3 'Service charges: provision of information and designated accounts.
	Government amendments Nos. 51 to 59.

Iain Wright: You rightly pulled me up, Mr. Speaker, on my inappropriate and somewhat hasty answer to the point the hon. Member for Montgomeryshire (Lembit pik) made earlier.
	Let me set out my general approach to the consideration of the Bill. Hon. Members will be pleased to hear that I will be as brief as I can in setting out the pertinent points relating to Government amendments. I want to ensure that the Bill gets as much scrutiny as possible on the Floor of the House. I also want other hon. Members to have time to raise important points and discuss important amendments.
	In answer to the hon. Member for Montgomeryshire, I have to say that I do not believe we are changing the fundamental nature and scope of the Bill. The Government amendments result from closeforensic, I may sayscrutiny in Committee in January. We agreed to bring forward a number of thingsI will talk in a moment about the importance of tolerated trespassersand have tabled a number of minor technical amendments relating to the Committee's scrutiny and deliberations. I should also like to give the House notice of a significant series of amendments and a new clausenew clause 27regarding the standards, the direction and the relationship between the Secretary of State, Oftenant and registered providers in the regulatory framework. Notwithstanding my point about being brief, I want to mention direction and standards at some length.

Lembit �pik: I hope that you will bear with me, Mr. Speaker, while I make my final procedural point about the timing. The Minister must accept that we have a ludicrously short time in which to discuss an enormous number of amendments, as I am sure the spokesperson for the official Opposition agrees. Can the Minister therefore give us an assurance that, should we run out of time, he will not only meet us proactively to see what we can do to put things right in the Lords, but act informally to get feedback from all the many housing-associated organisations, which are extremely frustrated at not being able to provide us or him with sufficient feedback, given that we first saw the amendments only five days ago?

Iain Wright: I reiterate the point that I have already made: we are not amending major parts of the Bill out of the blue. Many of the amendments are technical and complex, but the Bill has been through the Committee stage, which is important. I want to be as brief as possible, to give other right hon. and hon. Members time to speak, but let me first make the point again that the Bill has been through the Public Bill Committee stage. There was tremendously detailed clause-by-clause scrutiny, and I am satisfied that it is in a better state on Report, thanks to the deliberations of right hon. and hon. Members, than it was when it first started on 10 January.

Bob Spink: I am grateful to the Minister for generously giving way. New clause 11 refers to the status of existing occupiers. Can he explain exactly how those occupiers will be protected when tenants have voted to stay with the council, rather than going with a housing association? How will those occupiers ensure that the finances are in place for the council to continue to maintain their properties properly, achieve the decent homes standard and deliver additional social housing units where they are needed, in constituencies such as Mr. Speaker's and mine?

Iain Wright: I am grateful to the hon. Gentleman for making that point, which I will mention when I speak to Government new clause 11.

Simon Hughes: Just to be clear, so that we can save time later, can the Minister tell us how many Opposition amendments were accepted in Committeeso that we know whether the Bill was amended only where the Government wanted to amend itand how many Opposition new clauses and amendments that are tabled for today are the Government willing to accept?

Iain Wright: Those are two important questions. On the first, there was detailedforensic, I would sayscrutiny of the Bill in the Public Bill Committee, thanks to the hon. Member for Montgomeryshire, who played a sterling role. Despite taking to the field late in the day, he did an excellent job. In conjunction with the detailed and, importantly, forensic scrutiny of the Bill, there was an element of consensus in certain key areas, too, such as sustainable development, with regard to the Homes and Communities Agency, on which the hon. Gentleman tabled an amendment. He has tabled another amendment todayoff the top of my head, I think it is amendment No. 229which will become irrelevant, because we are bringing forward something else.
	In response to the distinct questions that the hon. Member for North Southwark and Bermondsey (Simon Hughes) asked, I can say that we have shaped the Bill according to what we need to do and, taking a consensual approach, have brought forward measures on tolerated trespassers, sustainable development and, crucially, the regulatory framework for Oftenant, about which hon. Members in all parts of the House mentioned concerns, particularly the right hon. Member for North-West Hampshire (Sir George Young). It is important that we should debate that.

Grant Shapps: The Minister will know that we had a good debate in Committee on all 242 clauses but, to our amazement, another 137 clauses have been tabled for today's debate, which will last about four hours. How he can define that as forensic scrutiny of the Bill, I have no idea. As we were given just three days to get our heads around the incredible number of amendments tabled by the Governmentfor procedural reasons, it was only a couple of hours ago that we found out what we would be facing todayI call on the Minister at least to acknowledge that that is not a satisfactory way to go about taking the Bill through Parliament.

Iain Wright: I take the point that the hon. Gentleman and others are making. I am proud of the Bill, so I am keen to make sure that it gets the scrutiny and deliberation that it deserves. I want to make sure that it receives sufficient attention. The hon. Members for North Southwark and Bermondsey and for Welwyn Hatfield (Grant Shapps) mentioned the hard work done in the Public Bill Committee; the Bill received a good deal of forensic examination there.
	The amendments that we are introducing today concern tolerated trespassers, the Homes and Communities Agency, sustainable development, and directions and standardsfor the Secretary of State, Oftenant and registered providersrelating to the regulatory framework that I mentioned. We have listened and learned; we listened to stakeholders and to right hon. and hon. Members. I want to ensure that we discuss the Bill. I deliberately did not table a programme motion because I wanted to avoid debate about procedure. I want to get on with the debate and ensure real scrutiny of the Government amendments that I am introducing. I would like to get on with the job.

Simon Hughes: I am not trying to delay the Ministerhe knows we think he is a good blokebut he is beginning to emulate the Prime Minister, in that he did not answer the question. The question is straightforward: how many Opposition amendments and new clauses were accepted in Committee?

Lembit �pik: None.

Simon Hughes: I have had a hint, but it would be helpful if the Minister could tell us the answer. Also, how many of the new clauses and amendments tabled todaythere are 98 Opposition amendments and 18 Opposition new clausesare the Government willing to accept? That is a simple question. Is it one, 10, 20, 30 or none?

Mr. Deputy Speaker: I would not like the Minister to be led astray, so before he answers, let me say that that is not the matter before the House. I would be grateful if the Minister dealt with the issue that we are considering.

Iain Wright: I am grateful to you Mr. Deputy Speaker. I was anxious to answer the question that time, but I will treat your ruling with the seriousness that it deserves.

Nick Raynsford: rose

Iain Wright: I will give way to my right hon. Friend, but first may I pay tribute to him on the Floor of the House? He did an amazing and sterling job in Committee, and made sure that the Bill is much better than it was when the Committee stage started, so I thank him for that.

Nick Raynsford: I am extremely grateful to my hon. Friend for those kind remarks, and may I return the compliment by saying that I, for one, am extremely pleased that a significant number of Government amendments have been tabled today that build on issues raised by hon. Members in all parts of the House in Committee? The hon. Member for North Southwark and Bermondsey (Simon Hughes) knows perfectly well that Opposition amendments are rarely accepted, because the way in which many of them are drafted makes it impractical to incorporate them in a Bill. He has been in the House long enough to know that the reality is that the key test is whether the Government respond positively to issues that have been raised, where there is a case for change, and I congratulate my hon. Friend the Minister on doing just that.

Iain Wright: I am grateful for that contribution. My right hon. Friend makes the point well that we have been a listening Government when it comes to the Housing and Regeneration Bill. There were major concerns, particularly with regard to the regulatory framework. Accusations were made, and I hope to deal with that subject at length later in our proceedingsif I stop taking interventions, that is. The point was made that there are major concerns about the regulatory framework. There were accusations that the Secretary of State could policy-passport matters for registered providers, that there was no freedom as regards the corporate direction of the boards of registered social landlords, and that there could be micro-management on the part of the Secretary of State. We have listened and we have learned, and I pay tribute to my right hon. Friend for helping to make that happen.
	My hon. Friend the Member for City of Durham (Dr. Blackman-Woods), who is not in the Chamber, made an important point about sustainable development and the Homes and Communities Agency; we took that on board. The hon. Member for Montgomeryshire mentioned tolerated trespassers. New clause 11 deals with that subject, and I shall say more about it at some point.
	The essential fact, which I must state very firmly, is that we are not introducing measures that were not discussed in Committee. The level of debate has been appropriate to the magnitude and stature of the Bill.

Lembit �pik: rose

Iain Wright: I should like to move on, but I will give way to the hon. Gentleman first.

Lembit �pik: I am going to help the Minister to move on. I agree that the Government seem to have listened to some of the discussions that took place in Committee. I give credit to the Minister, who is a pleasure to work with because he does not always follow the line that is given at the beginning of a debate. However, in view of the terrible squeeze on our time, will he assist us by highlighting the interrelationship between the amendments tabled by me, by Conservative Front Benchers and by others, and the Government amendments? That would help us to see where the Government have adopted our thinking, and might avoid the need for us to argue a case for amendments that the Minister genuinely believes the Government have embraced in spiritif not in terms of the exact wordingin their own amendments.

Iain Wright: The hon. Gentleman has made an important point. I shall try to make that clear throughout my speech.
	I am aware that, having spoken for 13 minutes, I am still dealing with new clause 11. Given that, according to the hon. Member for Montgomeryshire, we have only 73 seconds to debate each amendment, I think I should now move on.
	The new clauses and amendments deal with the tolerated trespasser doctrine. They will resolve the problem for existing tolerated trespassers, and will ensure that no tolerated trespassers are created in future. The changes will apply to secure, assured, introductory and demoted tenancies. The new clauses and amendments were tabled following a commitment that I gave in Committee, and in response to concerns expressed by Members in all parts of the CommitteeI say that particularly to the hon. Member for Montgomeryshireand by stakeholders.
	An important group of amendments centres on Government new clause 12, which will allow all affordable housing providers, not just housing associations, to offer shared ownership properties for sale without the risk of so-called early enfranchisement, in which the sharing owner acquires the freehold of the property before he or she has acquired 100 per cent. of the equitable interest in the house under the terms of the shared ownership lease. Let me emphasise again to the hon. Member for Montgomeryshire that Members of all parties made points about affordable housing, the principles of shared ownership and, in particular, rural areas. To be fair to the hon. Gentleman and his party, I know that that last issue concerns the Liberal Democrats greatly.
	Our proposed measures will end the lack of protection for non-housing association providers in current leasehold legislation from the risk of early enfranchisement, thus removing the disincentive for a variety of providers to offer shared ownership properties. Amendments Nos. 32 to 39 will help to ensure that all shared ownership properties, irrespective of the provider, can be retained for future purchasers in protected areas. As I have already hinted, I am thinking especially of rural areas where replacement has proved difficult and where we need to do more to retain and replenish the stock.
	I am keen to hear all the important points that will be raised, so I will now be brief. Government new clause 13 and new schedule 3, along with the related consequential amendments Nos. 48, 49, 52, 54, 55, 57 and 58, establish new requirements for landlords to provide regular service charge statements containing specified accounting information. I risk incurring, at an early stage, the wrath of my hon. Friend the Member for Great Grimsby (Mr. Mitchell): I am ashamed to admit that I am a chartered accountant. I know how much my hon. Friend loves chartered accountants, but I think it important to ensure that we have specific provisions on accounting information.
	I shall end my speech here, as I want to provide the maximum time for Members to raise important issues.

George Young: In response to what the Minister said at the beginning of his speech, may I say that it might have been politic if he had briefly apologised to the House for waiting until almost the last minute before tabling 37 pages of amendments? The Bill had an unusually long lapse of timeeight weeksbetween Committee and Report. Waiting right until the end before tabling 37 pages of amendments and then writing to members of the Committee an eight-page letter, which I received only today, does not give us enough time to consult the organisations that have an interest in the Bill. When the Minister replies to this group of amendments and new clauses, I hope he will find it within himself to apologise for any discourtesy. I raised this matter at business questions, and the Leader of the House promised to pass on to the Secretary of State my message that the first speech from the Government side should include an apology for this cavalier treatment of the House. I hope that the Minister can do that.
	We had a harmonious and constructive Public Bill Committee stage, but I am slightly worried that we may not be able to give the same degree of scrutiny to the Government new clauses before us this afternoon as we did to similar proposals in Committee.
	I have a particular interest in new clause 9, which I tabled. It deals with ground 8 possession action for rent arrears in housing benefit. If the Minister had been looking for an issue on which to do some bridge building, my new clause would have provided the basis for doing so. When I moved what was then new clause 12 in Committee, I received support from the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) and from the hon. Members for Luton, South (Margaret Moran) and for Edmonton (Mr. Love). All who spoke in that Committee debate were concerned about the use of ground 8.
	In a nutshell, ground 8 means that a court has no discretion whatever and has to give possession if the rent is in arrears for more than two months. The new clause I then proposed sought to exempt social landlords from that obligation and to give the court discretion not to award possession where, for example, the reason for the arrears was the local authority's failure to pay the housing benefit. I thought that I made a powerful case, and, indeed, when the Minister replied in Committee, he opened his remarks by saying:
	How can I possibly refuse the last amendment from the right hon. Gentleman? [Official Report, Housing and Regeneration Public Bill Committee, 22 January 2008; c. 467.]
	Yet he went on to do exactly that. It was only when I managed to encourage the appropriate body language from himas can be seen in column 469, when I asked him to have another look at the issue on Reportthat I decided not to press the matter to a Division.
	In the meantime, the Minister kindly wrote to me on 19 March about ground 8 possession for rent arrears, but I have to say that I was not wholly reassured by what he said. Rejecting ground 8 amendments, he said:
	However, it is also clear that these concerns are based on a very limited and predominately anecdotal evidence base.
	I have with me some Shelter briefings that list a large number of cases in which ground 8 has led to possession proceedings, so I am not persuaded that the evidence is primarily anecdotal or that Shelter would take kindly to that description of the briefing it has supplied to me and others. Towards the end of his letter, the Minister appears to concede the case, saying:
	However, concerns appear to remain over the actions of a small minority of RSLs and I am keen to see that these are resolved.
	Well, so am I, and the way to resolve them is to accept new clause 9, which gives the courts discretion not to award possession. Let me remind the Minister that Lord Justice Dyson said of the current position:
	We acknowledge that this conclusion will lead to tenants who are in receipt of housing benefit having no defence to a claim for possession in circumstances where they are not at fault. The statutory scheme is, therefore, potentially draconian in its application.
	The Minister will know that Scotland has already changed its law. Section 12 of the Homelessness etc. (Scotland) Act 2003 amends ground 8 to give courts discretion in rent arrears cases when housing benefit issues are outstanding. The Law Commission recommended in its April 2006 report Renting Homes: The Final Report that ground 8 should be abolished. The Minister has made other amendments to the law on repossessionI think he has amended ground 1but he has not amended ground 8. I hope, however, that even at this late stage he will think again and see whether he cannot do in England what has already been done in Scotland and prevent the tenants of social landlords from being evicted when, through no fault of their own, they are in rent arrears because the local authority has not paid their housing benefit on time.

Michael Meacher: I have a great deal of sympathy with what the right hon. Member for North-West Hampshire (Sir George Young) said about new clause 9, but I want to speak specifically to new clause 8, which is not entirely unrelated and which goes to the heart of the Government's policy on council housing.
	There are three drivers behind new clause 8. First, the demand for social and affordable housing in the country at present far exceeds what could be accommodated by the Government's present plans for the sector. Secondly, it is unrealistic to rely on the private sector to provide decent, secure homes that people on lower incomes need at prices that they can afford; nor, unfortunately, is there evidencequite the contrarythat housing associations are rising to the challenge to fill the gap. Thirdly, the funding for local authorities to maintain and repair their existing stock, let alone to build the new homes that are so desperately needed, is grossly inadequate.
	On the first point, the Government say that they propose to increase the number of houses built per year from 200,000 to 240,000, to reach a total, which we have heard so many times, of 3 million by 2020. But the current baseline, of course, is not 200,000; it is actually about 170,000. That figure is likely to fall, sadly, for a number of years ahead, because of the sub-prime market disaster gradually deepening and the credit crunch. The number of specifically social and affordable houses needed is estimated by Shelter to be over 50 per cent. higher than under the Government's current spending plans and more than 100 per cent. by Alan Holmans, who is a very respected housing economist, if the backlog of housing need is to be met within a reasonable period, which I am sure that all Members on both sides of the House would wish.
	On the second point, there is no way in which the private sector in the current economic climate will be remotely able to fill the gap; nor, indeed, is it very wise for it to try to do so anyway. According to a parliamentary answer that I received in November, more than 200,000 households have already taken out mortgages with a house price to income ratio in excess of six to one, including 38,000 with a ratio in excess of 10 to one. That is clearly unsustainable. We are already in great danger of generating our own sub-prime market disaster, toonot just in the USand we certainly do not want to make things any worse.
	The passion for private ownership, which I find very difficult to understand but with which the Government seem to be obsessed just as much as the previous Tory Government were, is absolutely fine for people who can afford itprobably all hon. Members own their own housebut it is not shared by the majority of people on low incomes at the bottom end of the scale. Probably a fifth of the population, or something of that order, have such low incomes and such uncertain employment prospects that they will never be able, under present circumstances, to afford to buy and maintain a home. For them, what is clearly needed is good quality, secure public housing at rents that they can genuinely afford. That is the issue at the heart of the Bill. Indeed, that is the message that, given current housing demand, people are crying out for the Government to hear.
	In 2006, 1.6 million households were on council waiting lists. I have not seen later figures, but I suspect that today the number is nearer 2 million. Indeed, 12,000 are currently on the council waiting lists in my Oldham constituency, yet the total council housing stock in Oldham is today only about 12,500, down from 27,000 some 20 years ago. In addition, across the country almost 100,000 households are homeless and in temporary accommodation, according to a technical view of homelessness.
	Let me turn to a key issue by relating a remarkable fact. There can be no clearer indication that the demand for council housing is both very strong and growing despite the pressure-cooker conditions that now prevail in terms of public rented housing, than that 2.5 million existing council tenants have opted to remain with their council even though the Government have denied them the fundamental basic right of the fourth option. Regretfully, I must say that I think that denial is morally and politically indefensible.

Simon Hughes: Does the right hon. Gentleman accept that some councils have supported their tenants in remaining council tenants not at arm's length or in any other such way, but as ordinary, straightforward, traditional council tenants? In my borough, all four parties on the council support that view. Some councils still resist Government attempts at bribing and blandishment to force them to have an arrangement that the tenants and all their elected representatives do not want.

Michael Meacher: I fully accept that, and it is the background to the point I am about to make. Given the huge and swelling extent of unmet housing need, it is crucial that the funding of public rented housingin particular the levels of management and maintenance allowance and the major repair allowanceis wholly adequate. It clearly is not at present. A new Government report out this month, Self-financing of council housing services: summary of findings of a modelling exercise, astonishingly states that current allowances undercut
	basic investment needs by 43 per cent. over 30 years.
	Coming from an official Government report, that is a staggering statement: the funding provided for council housing is little more than half of what is neededthat is official.
	The report was published by the Department for Communities and Local Government, and it also states that
	anticipated levels of future subsidy...are not sufficient to maintain a sustainable level of housing services within the HRA
	housing revenue account
	subsidy system.
	That is also a remarkable statement. This shortfall in allowances is what is driving councils to privatise their homes in defiance of the wishes of their tenantsand against the wishes of most of the councillors as well. It also means that many local authorities cannot meet the Government's decent housing standard, and that many who can at present will be unable to sustain the standard in the longer term.
	Other amendments in the group, notably new clause 1, protest at the bullying and blackmailing of tenants into stock transfer by some councilsand by quite a lot of landlordsbut that will continue to happen unless the basic management allowances are substantially raised along the lines set out in new clause 8. That is my basic case.
	Perversely, the net funding trail is going in the opposite direction. Council rents are rising faster in order to close the gap on private rents in the locality. Ideologically, that turns the whole purpose of council housing on its head. Council rents are even rising higher than expenditure, so that tenants are paying what amounts to a tax to the Treasury, which works out at some 180 million this yeara parliamentary answer of 18 December last year even suggested that the figure could rise to 900 million a year by 2022. That is on top of the 1.5 billion taken each year from council housing revenue accounts, ostensibly to pay back historical debt. That, again, is odd because tenants do not own the stock and it is difficult to see why they should be burdened with having to service the debt.
	New clause 8 is about justice for tenants. It would require the Secretary of State to calculate the housing revenue account subsidy needed to ensure that local authorities can properly manage, maintain and repair their homes and
	acquire, rehabilitate and build new housing
	so as to be able to meet
	the need for affordable housing within their respective areas.
	That moderate, reasonable and measured request is long overdue and it is now incumbent on the Government to commit to that position. If they do not, I intend to support new clause 8 in tonight's Divisions.

Simon Hughes: I, too, shall be brief, although these are large matters that affect huge numbers of people. I believe that I am still the Member of Parliament who represents the largest number of council tenantsabout 40,000who live in some two thirds of all the homes in my constituency. A further 10,000 people in my constituency have bought under the right to buy and are leaseholders of the council, so they, too, have a council interest. I wish to discuss the amendments and new clauses relating to those two groups.
	I wholeheartedly endorse new clause 1 and new clause 8, which has just been discussed by the right hon. Member for Oldham, West and Royton (Mr. Meacher). The regime affecting councils and their council housing stock continues to be nonsensically unfair and unreasonable. It is not justifiable not to have a level playing field whereby the money put in can be put back into the housing stock for which it is raised. Where the tested democratic wishes of the tenants, plus their elected representatives, want council housing to continue, the Government cannot have it both waysthey cannot say that they believe in the devolution of decision making and then force other outcomes and fiddle the financing to make things much more difficult, as the right hon. Gentleman made clear.
	Southwark council has resisted all attempts to force stock transfer and will go on resisting them even if it has to raise its own capital to do so. If the Government ever insisted on forcing us or trying to force us, we would go to court to challenge them. I am advised by colleagues that that would be the approach. The Liberal Democrats are the majority party in the joint administration, but that is the view of all four parties with elected representatives on the councilthe Liberal Democrats, the Labour party, the Conservative party and the Green party.
	Secondly, I am surprised that the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Wright), who understands council housing matters from events in his own constituency and the history of the north-east, has not managed to persuade the Government that their policy in this area has been flawed and that we need a regime, such as that proposed in new clause 1, tabled by the hon. Member for Great Grimsby (Mr. Mitchell), which would ensure that the decision-making processes are fair, transparent and not rigged against the interests of tenants. I shall leave others to make that case. Many colleagues are, in general terms, part of a movement called Defend Council Housing, and they believe that council housing was, is and will continue to be a good thing.
	The first council housing in England was in my constituency, too. It was built by a very eminent MP, Dr. Salter, who was originally a Liberal and then a member of the independent Labour party, and his colleagues in Wilson grove in Bermondsey. It is still there. People want to live in it. It is decent housing, built in the 1920s. Many other places followed that traditionit is a 20th-century version of the social housing tradition set by some housing associations, of which we are very proud.
	The Government seem to believe that the only happy council tenants live in council estates where every other resident is not a council tenant. That has never been my experience. People are happy to live next to other council tenants. If the management is good, they do not insist that the person next door is an owner-occupier or the tenant of a social landlord or housing association. They are happy that the other people are council tenants as long as the management is good. If management is good, council tenancies are often more popular. People would often rather be a council tenant than a tenant of a housing association, because councils are often much more accountable to their tenants. At least with councils, tenants can kick out the management every four years.
	I am about to have a meeting with the Guinness Trust. For years, the tenants of Guinness Trust properties in my constituencyone near London Bridge and Guy's hospital at Snowfields, one off the Old Kent road at Pages walk, and one in Kenningtonhave felt that the service has been lousy and unresponsive. The chief executive comes to meetings. He is a nice man and he makes lots of promises, but he does not deliver on them. The same applies to the Peabody Trust, which is also based in my constituency. It is a good organisation, but often has not delivered. Housing associations, particularly the bigger ones, often fail. That is why council housing is a good thing. I would hope that a Labour Government share that view.
	I want to speak briefly about new clauses 29 and 31 and amendment No. 145, which are tabled in my name. The Minister and his advisers will notice that they are familiar. That is because they feature in my Leasehold Reform Bill, which was number 14 in the ballot for private Members' Bills and got off the runway a few weeks ago, when I was able to start Second Reading. If the Minister is not willing to buy these provisionsif I cannot incorporate them into this BillI hope that by the end of the next few weeks he will agree to either this wording or some other wording so that my Bill can become law as a complement to this Bill.
	New clause 29 is simple. It would allow local authorities to set up sinking funds. Councils used to have sinking funds, but they were abolished following a court case. Effectively, we will never again have a communal sinking fund, for all sorts of reasons with which I need not trouble the House. Such a fund is a bit like a piggy bank. People often prefer to put in money up front against the rainy day when they will have to pay money for capital works. The new clause would allow councils to set up sinking funds that were specific to a property. That would mean that the leaseholder could put some money aside so that there was some money in the kitty five years later, when the roof had to be done or the lifts had to be replaced. The provision would be discretionarythe leaseholder would not have to put money into the sinking fundbut it would clarify the uncertainty of the legal provision. Such a provision would be widely welcomedI have consulted widely on that.
	More important is new clause 31, which would fundamentally change for the better the way in which leaseholders are consulted about works on their estates. Most leaseholders in North Southwark and Bermondsey are on estates. The Government tell the council that it has to comply with the decent home standard by 2010, and the council says, Yes, Government. We are happy to do that. The date might slip a bit to 2011 due to the debate about the money. However, the implication is that although the tenant gets the work done at no significant extra cost as it is paid for by the housing revenue account, the leaseholder is billed for the work. They are not against it, but the bill can be very expensive. You may know, Mr. Deputy Speaker, although I do not know what the situation is in your constituency, that the bill for capital works can be as high as 27,000. That can come out of the blue to a pensioner couple with no reserves. The new clause would ensure that the residents and the leaseholders were involved at all stages of the process.
	Proposed subsection (2), for example, would require consultation by the landlord, the council, with the leaseholdersthey are confusingly called tenants in the Bill and the Landlord and Tenant Act 1985, which the new clause would amendon specifications for any tenders. It would also allow tenants, or a tenants and residents association, to have a counter-proposal considered by the local authority if they were to get support from 25 per cent. of their total number. The council might say, We are going to replace all the windows and doors in your tower block. If there were support for a counter-proposal that actually the windows did not need to be replaced, just the doors, it would have to be put as an alternative in a ballot. If the counter-proposal were supported by 25 per cent. of the tenants or more, such a ballot would be agreed to.
	The new clause would require the documents on such matters to be kept and available for at least 10 years. One problem that has occurred, including on the Brandon estate in Walworth, on the Southwark-Lambeth border, has been whether proposals for new windows are acceptable and compatible with the style of the property concerned. That issue can be contentious, and it returns later when an idea is suddenly resurrected. People quite rightly say, We want to see the paperworkthe justification of why the windows need to be replaced. Often, the documents are not available for as long as 10 years. In the life of a leaseholder, 10 years may be quite a short time to be in a property, so the new clause would set a 10-year minimum requirement for keeping the documents.
	Finally, the new clause suggests that local authorities should be able to set up independent local arbitration tribunals. The leasehold valuation tribunal, which is a national body, is a good thing, but somebody has to pay to have a case there. By definition, as it is national, it is not local. There are some good arbitration bodieswe have a very good mediation service in Southwarkbut not every local authority has one. The new clause would allow a local arbitration procedure, so that if there were a dispute between the council and the leaseholders, both sides could agree to the case being resolved locally, at little or no cost. Tribunals would obviously have to be independent, not run by the council.
	With regard to amendment No. 145, sometimes, understandably, councils have to do things because the Government tell them to. That is okay, if that is what Parliament agrees and gives the Government the power to do. Decent homes policy is one such example. The Labour Government decided that there should be a policy of upgrading all social housing to minimum standards by 2010-11, and I supported them. That might slip slightly, but the principle is good. When that was agreed and imposed, however, there was no consultation with leaseholders about its impact. It is very important that, if the Government initiate a policy, there is consultation with leaseholders about its impact on them, not just on tenants.
	Tenants and leaseholders would be much better served if the new clauses on their issues were agreed to. You saved the Minister earlier, Mr. Deputy Speaker, from owning up to the fact that the Government have not yet accepted any amendments or new clauses. He has an opportunity to redeem himself, gain credibility and gain love and support from tenants and leaseholders. He can improve the prospects of the Labour party in the elections on 1 May in London and elsewhere. In the end, he can do what is right for tenants and leaseholders by accepting the new clauses. I hope that he will be brave enough to make his name by doing that. If not, I promise him that my Bill will come back in June, and will be back again and again until, eventually, he will have to give in.

Austin Mitchell: I rise to speak to new clause 1, amendment No. 5 and new clause 8. My hon. Friend the Minister told us that he would continue to listen to the debate, and I assure him that the council house group in whose serried ranks I sit is also continuing to listen. Our proposals in the new clauses and the amendment, and in other measures that will be considered later, are meant to help the Government to achieve their proclaimed purpose of launching a housing drive.
	That will be difficult because the fall in house prices as a result of the sub-prime crisis will discourage builders. It will also be difficult because, although the Bill greatly helps registered social landlords, they are not the most thrusting and dynamic force when it comes to launching building drives. Indeed, RSLs have not taken up the money already made available by the Housing Corporation; they show a laggard lethargy and do not want to take risks. They would rather build balances and surpluses than new houses.
	We want to help the Minister in his building drive and we want a better deal for council housing, which is also the Government's intention. We were told last year that they would relaunch council house building and councils would be allowed to build. We welcome that and we want to move those proposals on, because the Bill's impact assessment indicates that only 2,500 council houses a year will be built under the measure. That may be an increase on the current pathetic totals, but it does not match demand1.6 million people are on council house waiting lists.
	The bad thing about the Bill is that it keeps up the pressure on councils to privatise their housing stock. Over the years, they have been bullied, bribed and bamboozled into getting rid of their stock and privatising it. It is unreasonable of the Government to keep up such pressure on councils that want to retain their housing stock, while at the same time trying to encourage councils to build. The Government should not bash councils by cutting funding while expecting them to contribute to the housing drive, which is necessary. Councils should contribute, because they know the needs of their area and can give a lead.
	New clause 1 and amendment No. 5 would restrict pressure to privatise. The ballots that are compulsory for RSLs that indulge in large-scale voluntary transfers are in many cases undemocratic and unreasonable, and in a few cases a travesty of democracyPresident Mugabe, through his observers in the UK, has almost certainly learned lessons from how such ballots were conducted in the past.
	I instance the fate of my attempts to oppose a proposal for a large-scale voluntary transfer in Grimsby. I prepared a magnificent pamphlet with brilliant photographs, by me, of people who opposed the transfers. As soon as the council heard of the imminent publication of that great opusmy fantastic argumentit brought forward the ballot, so my pamphlet was issued five days after everybody had received their ballot papers.
	I wrote to the Electoral Reform Society to protest, as one does on such occasions, and received the reply that it had no control over the timing of the ballot, which was entirely up to the council, but that most people who vote in such ballots do so within four days of receiving the ballot paper. My pamphlet went out on day 5, so that information was extremely comforting.
	Housing officers were going around saying, Vote for privatisation because you love us and you want us to keep our jobs. The electors were deluged with videos made by rival television personalities, telling them that their bathrooms would be done up by Jacques Cousteau and their gardens developed by Ground Force. They were told that their houses would have fantastic dcor, with safety features, new doors and windows, and new kitchens, bedrooms and bathrooms. They would be living in paradise.
	The situation was extremely unbalanced. I shall not go on, but such practices are found all over the country. In Sefton, for instance, the council lost the ballot for large-scale voluntary transfer and promptly issued lawyers' letters to the protestors, telling them that they must not interfere in the democratic process. Within a few weeks, the council held another ballot that, on a lower poll, reversed the verdict of the first.
	That is the kind of undemocratic practice that has been going on. I have a list of examples. I will be happy to supply my hon. Friend the Minister with it, because I know that he wants to address those problems. The Bill proposes that tenants have a right of appeal against a ballot, but appeals must be made within 28 days. These people are not tenants of the Inns of Court, but council housing tenants28 days is not long enough for them to organise an appeal and make a case, so the time limit needs to be extended.
	To give another couple of examples, the City and County of Swansea resolved that
	notwithstanding expenditure in excess of 1.4 million by the cabinet, a fair and balanced case was not presented to tenants.
	In north-east Somerset and west Wiltshire, the district auditor found that the local authority had acted unlawfully in using public money to promote stock transfer. I have a long list of such examples, which show that there has been a travesty of democracy. We have held two conferences for tenants from all over the country, who expressed their concerns.

John Hemming: I share the hon. Gentleman's concern about the ludicrous way in which one-sided arguments are made in large-scale voluntary transfers. In new clause 1(2)(h), he proposes a limit on the amount of money that is spent. In Birmingham, which, admittedly, is the largest public sector landlord, 12 million was spent about five years ago to try to bamboozle tenants into a stock transfer. Would that be covered by his provision? What is a reasonable limit?

Austin Mitchell: Enormous amounts of money have been spent. I do not wish to make a judgment on Birminghamthat is up to Birmingham Membersbut we are spending millions to give away billions in public assets such as land, housing and public property. It is a one-sided argument, which is why we tabled the new clause. We want to try to produce a fairer balance for tenants, whom the Minister wants to empower. However, tenants for and against have to be empowered. At least the Minister is listening, and I hope he has heard what has been said about the unfairness of the procedures and tries to rectify the situation.
	New clause 8 deals with the financial situation of councils, which is crucial if we are to keep council housing in the state sector. That is my preference. There are still 2.8 million council houses in the UK, and I want the Bill to do more for the people who live in them. They are the neglected majority in social housing, and we need to do more for them.
	We considered reform of the housing revenue account, but the Secretary of State is holding a review of that account, which will report next year. We decided not to tackle the issue in that fashion, and not to question the subsidy transfers, from which some people gain and most lose. Chesterfield has been vociferous in telling us how much it loses.
	I will not go into the issues of historic debt or right-to-buy sales, the proceeds of which have not been put back into local housing, as all those are for the housing revenue account review. However, there is a major problem that the Bill must deal withthe inadequate funding of council maintenance, management and major reviews over a long period. That is on top of big extractions from the housing revenue account. Over the years, some 13 billion has been taken from that account by daylight robbery. The Government are still taking 1.6 billion out of housing revenue accounts, and they are still taking 0.5 billion from right-to-buy sales. Inevitably, that produces a rankling sense of injustice.

Lynne Jones: My hon. Friend makes an important point about the amount of money that has been stolen out of council housing. Is it not about time that we scotched the myth that council tenants are subsidised and feather-bedded? Far from it, resources have been taken out of council housing, which should have been invested for the benefit of council tenants and for the thousands of people on the waiting list.

Austin Mitchell: My hon. Friend is right. Money is being taken out of the pocket of council tenants and out of the housing revenue accounts that should be used for the improvement of their housing. Indeed, it has not only been taken in the form of the 1.5 billion soon to be 1.6 billionthat is taken out of housing revenue accounts to be recirculated through subsidy or to pay off historic debt, but my hon. Friend the Minister admitted in a parliamentary answer last December that, on top of all those extractions, the national housing revenue account will go into surplus in the coming year. Effectively, that is another tax of 180 million from housing revenue accounts taken out because, with the increase in rents, the fund has moved into surplus. That surplus will go on growing, and it will reach 1 billion by 2022 if nothing is done about it.
	Huge sums are being taken from council tenants, who are being unfairly treated. Interesting light has been shed on that and on the financing of council housing by the study of six authorities opting out of the housing revenue accounts. The study, which is the reason for the new clause, was conducted by the Department and published only last week. The review concludes that
	the business plans for all authorities indicate they need a level of investment over 30 years which is higher than the spending needs assumed in the HRA subsidy . . . In other words, their plans for basic sustainability would not be deliverable within the HRA subsidy system if current policies are maintained.
	Steve Partridge, the Housing Quality Network consultant who was advising the inquiry, tells us that
	the major repairs allowance across the country
	is
	40 per cent. short of what most people would estimate is a minimum investment need over 30 years.
	He also said that the report identifies the fact that current allowances undercut
	basic investment needs by 43 per cent. over 30 years.
	The Government and the Bill cannot go on in this fashion. They must do something to help and support councils that are struggling to maintain their stocks and to achieve a decent homes target, but are being penalised by the Government in this way. That is not good enough. The new clause offers a chance to do something about it, which the Government should take because they need sustainable council house funding. It is no use saying, We will review these matters next year when the report comes in. There is pressure on councils now.
	Perhaps a couple of hundred councils will be forced to conduct large-scale voluntary transfers, or to attempt to do so, and will put the proposal before the electors, possibly for a second time, or in some cases a third, unless they get help from the Bill now. It is no use saying, Next year we will look at the whole thing again and give councils a fairer deal. The need exists now and the Government must do something. That is the purpose of our amendments.

Mike Hancock: Does the hon. Gentleman agree that this is virtually the last chance for some local authorities? If they do not get that help now, they will have no choice about fighting off the privatisation of their council houses. They will have to go along with it reluctantly, because they simply will not be able to afford to resist. They will then have to advise their council tenants, We had no choice because the Government have not listened, although we know you would like us to be your landlord.

Austin Mitchell: Absolutely. Another year's delay is a pistol held directly to the head not only of tenants but of many local authorities, which have been struggling to carry on improving and maintaining council houses and reach the decent homes standard. Some will not reach it, yet our manifesto commitment is that it should be reached.
	Only by making the kind of change that I have mentioned, not by waiting for the housing revenue account review, will we be able to bring justice to those tenants and councillors now. I worry lest the Government's insistence on waiting until next year is just subterfuge to keep up the pressure of bribery, bamboozlement and bullying on councils to privatise their stock. I hope that that is not the case, but my worry could be avoided through new clause 8.

Robert Syms: In introducing the debate and the programme motion, the Minister talked about the Public Bill Committee. The debate on Report is an opportunity for all Back Benchersnot only those, such as me, who had the privilege of serving on the Committeeto contribute to the Bill. I suspect that today's debate will be dominated by new clauses 1 and 8, to which the hon. Member for Great Grimsby (Mr. Mitchell) spoke. I support a lot of what he and the right hon. Member for Oldham, West and Royton (Mr. Meacher) said.
	However we look at it, council housing will be an important part of our housing stock for many years; it is clear that stock transfer is not going ahead at the rate that the Government would like. There will be authorities that maintain their council housing, and if we are to meet the decent homes standard by 2010 and to have decent housing generally, we must take a view about the many millions of people who live in council housing in our country.
	New clause 1 is a useful opportunity that allows us to argue a little about the principles on which housing policy should be based. It would be useful if, at the end of the debate, the Minister made a policy statement on where the Government stand on council housing, because we are not entirely sure of where that is. If there is an issue that the House has not debated enough, it is council housing. I remember one or two Westminster Hall debates on the subject, but it has not been broadly debated. I hope that the Minister will take the opportunity to set out where the Government stand.
	I particularly want to talk a little about new clause 8. I became aware of the housing revenue account subsidy system only recently, when I realised that 20 per cent. of all the rents paid by tenants in Poole were taken by the Government to use elsewhere. Taking money out of housing revenue accountsin Poole, there is an arm's-length management organisationessentially means taking money from tenants in one area to subsidise tenants in another. As we have heard in this debate, well in excess of 100 million is taken from some council tenants to subside others.
	I have always believed that need has to be the basis of housing policy. However, if it is to be that, it should be met by national taxation, not by using tenants in one area, who may be less well off, to subsidise tenants elsewhere. The figures have been mentioned today: well over 180 million comes from tenants' rents, and in the vast majority of districts and boroughs people make some contribution, predominantly to the larger cities and inner London. Nevertheless, the transfer of funds and money is very substantial.
	Nobody quite understands how the formula is worked out and I welcome the fact that the Government are having a review. However, I suspect that the review will be only modest and I know that some authorities that want to opt out of the subsidy system have been negotiating with the Department, which, as I understand it, wants them to buy themselves out of that system. At the end of the day, if the authorities have to buy themselves out of the system, it may not be worth their leaving it.
	I have another point to make about the benefits of council housing versus stock transfer and everything else. If there is a subsidy system in which a local area is losing millions in rents, there is an added incentive for stock transfer, even if the tenants are not pleased with that option because they feel that they are being penalised if they remain council tenants. The contributing authorities include not only relatively leafy Poole and the Surrey boroughs and districts, but authorities such as Bolsover, ChesterfieldI see the hon. Member for Chesterfield (Paul Holmes) sitting in his placePortsmouth and City of Durham. Many of the former mining areas have quite a lot of public sector stock. Money is coming out of the rents paid by tenants and being redistributed to the Camdens and other areas.
	We should be more transparent about what we are doing. If housing need is the basis of policy, it should be paid for out of general taxation, not by taking money from one set of tenants to subsidise another. In my own borough of Poole, we have very high house prices. That means that social housing takes more of the strain in relation to young couples. If Poole Housing Partnership was allowed the 3 million a year that is taken into new council housing or housing for the elderly, it could manage the housing stock for people generally. There is local demand that could be met if that money remained local.
	There must be a fundamental reform of the housing revenue subsidy system, which is not fair; I look forward to Government proposals on that. Liberal Democrat Members make an important point: unless there is reform soon, the consequences for many authorities, boroughs and districts that wish to retain council housing will become very severe.
	We need a statement from the Minister about council housing. As we have heard, 2.8 million people are still council tenants. Some very good housing authorities, run by local authorities of all political persuasions, provide good local housing. The hon. Member for Great Grimsby is right that some people would prefer to have their housing provided by a local authority than to opt out and be transferred into some new organisation that was subject, as we all know, to salaries going up, and that may not be as responsive to the demands of local people as the local council providing council housing and the local councillors whom people elect to protect their interests.
	It is a pity that the issue we are discussing was raised by a Back Bench rather than a Minister. Nevertheless, the debate is a useful and timely opportunity to raise these important matters.

John McDonnell: The House sometimes gets a bit nauseating in its self-congratulations, but my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) clinically set out the arguments for the new clause. I thank my hon. Friend the Member for Great Grimsby (Mr. Mitchell) not only for the new clause but for the work that he has done in recent years to maintain this campaign.
	I cannot understandmany of us cannotwhy the Government do not incorporate the new clause into the Bill, because it would precisely implement the Labour party's policy. It would also precisely fulfil the promise that was given by the Prime Minister when he was elected leader of the Labour party last year that we would start to build council housing again. When he made that statement, he was cheered to the rafters by Labour party members from constituencies across the country, who knew, as we did, what a housing crisis we were facing. I think that he gave that promise because he understood those problems. To be frank, it was an admission that the existing policy had failed. That policy was based on a belief that the private sector would provide the bulk of new housing that was required by our communities and on an antipathy to local government providing social housing, which led to a forced transfer of council properties into the housing association sector and, wherever possible, devices being used to prevent council houses from being built again.
	We need only look at the Government's own statistics to see what that has resulted in. I was elected in 1997, when we ran a campaign attacking the Conservatives for the scandalous fact that we had 40,000 homeless households. The number of homeless went up to 100,000. Last year, the figure dipped down to 80,000, but that is still a scandal. There is a crisis of housing and homelessness in my constituency such as we have not seen since just after the second world war. I have raised this matter in the House before; I find it emotionally difficult to cope with my surgery each week because of the number of people who turn up with their families, including their children, whom I can do nothing to assist because there is not an adequate supply of housing.
	About three quarters of those homeless families have children. I looked up the recent Government figures, and 112,000 children are now being brought up in homeless households, some 700 of whom are living in bed-and-breakfast accommodation. There are 700 children living in bed and breakfasts 11 years after the election of a Labour Government.

John Hemming: I share the hon. Gentleman's concern about children growing up in homeless, rather than roofless, circumstances. Would he agree that that state of affairs has knock-on effects, such as unstable housing and children having to move from school to school? That does not do much good for their education.

John McDonnell: It has catastrophic effects for children, their families and the wider community. There is a continuous churning of families in temporary accommodation with contracts for some housing lasting no more than 12 monthscertainly no more than two years in many cases. I thought that the Prime Minister had been clear about what had gone wrong: we had simply stopped building council houses. I looked at some of the figures from the last 20 years. In 1990, the Tories built 16,000 council properties. I know that because I was campaigning at that time in local government about the scandal of so few being built. Last year, we built 251 council properties. The argument will be made that social housing will be picked up by housing associations and other social landlords. It is not. In 1997, when we were elected, 28,554 homes provided by social landlords were built, and last year that number had fallen to 27,000.
	We are told that the private sector will make up the difference. The average price of a home is now 219,000, and house price inflation last year was 9 per cent. Many families in my constituency, and I am sure throughout the country, have a debt burden that can only be described as grinding. Individual borrowing is now 1.4 billion. In January alone, 8.4 billion was lent and 7.4 billion of that went on mortgages. It is a massive debt, and it is now predicted that 45,000 families will have their homes repossessed next year. That process has already started in my constituency and I am dealing with those families in my surgeries. Let us look at the Government figures again: 526,000 families, by the Government's assessment, are living in overcrowded conditions. We estimate that 3 million homes are needed, as the Government have said.
	As we heard from my hon. Friend the Member for Great Grimsby, the Bill will not fulfil the commitment that the Prime Minister made last year to build council houses again. The best estimate is a trivial 2,500 homes. The Bill will not enable councils to develop the properties that are desperately needed by our constituents, which is why I cannot understand why the amendment cannot be accepted. All it would do is require the Secretary of State to assess local needs and to provide resources to those agencies best suited to providing the homes that we need. In many instances, that will be the local authority. We know what has happened during the past 10 or 11 years when tenants have made decisions about who they prefer as their landlord. We know because it has happened in most of our constituencies. They are clearly told, If you don't vote to transfer to the ALMO or elsewhere, you won't get the money to repair and refurbish your properties. In any other circumstances, it would be called blackmail. All that the amendments tabled by my hon. Friend the Member for Great Grimsby would do is to produce a level playing field, not preferential treatment, to enable local councils to satisfy the desperate needs of our constituents.
	In half an hour, the Prime Minister will go to the parliamentary Labour party to urge a steadying of the ship, and to ask people to buckle down to fighting the local government elections and hold together. One of the ways in which we can restore the Labour vote in constituency after constituency is to go out there and tell people that we will accommodate them decently, build council homes again and treat council tenants fairly again. We will thus restore credibility with those people who put us in power in 1997 and stuck with us throughout the Tory decade and a half.
	New clause 1 is worthy of further consideration. I hope that the Under-Secretary does not reject it tonight. If he cannot accept it, at least let us have some further consideration. Perhaps we will then get a rational debate in the other place and a rational housing policy once again.

Mike Hancock: The hon. Member for Hayes and Harlington (John McDonnell) is not alone in his experience in his surgeries of the despair of those who face repossession. He is not alone in facing the damning lists of people who are desperate for housing, but he is right to tackle the matter in the way in which he has done.
	In my 37 years in local government, I always believed that council housing was a good thing for any local authority. I am proud to have been brought up in a council house and I was always proud of the relationship between the tenant, the local authority and the Government. That triangle of strength, whereby all three sides worked together, was good for people. It provided decent homes in areas where they were needed. Mistakes were madewe have all seen the consequencesbut the overwhelming majority of people who lived in council houses in the 1950s, 1960s, 1970s and 1980s believed that they were in a decent home and that they could rely on their landlord to take on their responsibilities.
	That position changed dramatically, first, under the Heath Administration with the Housing Finance Act 1972, which changed local authorities' responsibility. In the early 1980s, Prime Minister Thatcher fundamentally disposed of councils' right to build houses and made it increasingly difficult. She believed that she could change the system of providing social housing in this country. Hon. Members who have already spoken clearly identified that that experiment in trying to shift matters, which worked for a while, is failing now.
	The hon. Member for Hayes and Harlington eloquently exposed the decline in housing associations' ability to provide new housing. They do not want to take the risks involvedin many instances, they cannot afford it. They know that, if they build, few people will be able to afford the rents that they must charge for the development.

Stewart Jackson: The hon. Gentleman makes a powerful case, but surely he would not want inadvertently to mislead the House and he should perhaps examine the figures for the Blair Government. Since 1997, 17,300 social housing units were completed. In the previous 18 years, 46,600 a year were completed on average.

Mike Hancock: I welcome that intervention. I had not reached Tony Blair's part and his appalling treatment of local authorities, especially his total disregard of the role of council houses in providing answers to the housing crisis. Time and again, he mentioned the social consequences of crime and lack of education, but he never once faced up to the housing that his Government denied people. It is shameful for the Labour party, to which I once belonged. If I had not left it in 1980, I would have damn well done so in 1997, when Blair gave no commitment to councils' right to provide the sort of homes that they should have provided.
	New clause 1 is essential. If the Under-Secretary is seriousI accept the good faith that hon. Members have attributed to himabout rebuilding that partnership, new clause 1 is the foundation stone of making tenants believe that we now have a Government who will address their problems as applicants for housing, whether they are homeless; or elderly people who want to move into a different style of accommodation and are under-occupying their properties, but will not move because there is currently no viable offer; or those who desperately want to be rehoused because they are in overcrowded conditions; or the hundreds of thousands throughout the country who are being told by local authorities, not only mine, that they have no chance of being rehoused in a reasonable time.
	A reasonable time for some local authorities is 10 years, because the waiting lists are so long. My local authority has written to people on the housing waiting list and said, We've got to be honest with youyou're now wasting your time believing that the local authority or housing association is going to solve your housing needs. What a disgrace that a Labour Government in office for 11 years are forcing local authorities to take those steps. New clause 1 is fundamental. If the Minister sticks to his word, and listens and addresses those issues properly, new clause 1 will be essentialto him, his Government and the future of the Labour party, if it is ever to rekindle any support on housing that it might have had from the people of this country.
	Let me turn to the point that the right hon. Member for North-West Hampshire (Sir George Young) correctly made about new clause 9. Not many other hon. Members have addressed this issue, but he was right: ground 8 is essentially an unfair burden. Local authorities and housing associations have no choice but to implement that, while social landlords have no choice but to take the tenant to court to get either repossession or an order put on them. That imposes another financial burden, because once the proceedings start that tenant is responsible for the costs involved in the court case and so automatically faces another bill, of 200, on top of what they have already incurred. If we are talking about fairness, clause 9, which covers ground 8, is essential if the people affected more and more by that situation are to be offered any hope.
	I am delighted that so many hon. Members have spoken in support of new clause 8, which is our only chance to address once and for all the daylight robbery in the housing subsidy. The council tenants in my city are effectively mugged by the Government year by year. If the relevant provisions are not repealed, close to 100 million will have gone to the Government from our city over the 10-year period from when those provisions first started to bite to 2012. We can imagine what could have been done with that in Portsmouth. Instead, we are having to put council rents up, to help fund the subsidy rip-off that we as a city face and pay the Government. Robbing the least able peopletaking away money that could not only refurbish their properties sooner, but put in place the sort of housing that we desperately needis notoriously bad politics.
	The hon. Member for Poole (Mr. Syms) was right when he talked about his borough, but the situation is the same in many other local authorities. I listened to the Secretary of State when she addressed the issue in her presentation on housing a while ago. She said, Of course the hon. Member makes a point, but it's all going to be solved in this review, but we have no idea what the review is going to cover and have been given no indication whatever of what consultation will take place with local authorities. My local authority contacted the Government and asked questions about how the formula is worked out, but was told, It's very complicated. We know that it is complicatedthat is why we had to ask. We were at least entitled to a sensible answer from the very people who are mugging citizens in Portsmouth, year by year, to take that money.
	My hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) was right to talk about the problems of leaseholders. Again, we need to be careful, but the amendments that he has tabled address those problems. I meet many leaseholders who want the local authority to buy back their properties, because they cannot afford the surprises that they face when, for example, a new roof is put on a block in which there are only two leaseholders. They are suddenly confronted with bills not for a few hundred pounds but for 15,000 or 17,000. The local authority says to them, You can't spread the payment over a period. People who are in their late 60s or early 70s, or who are even older, face that sort of dilemma, and may then get a court order forcing them to pay the amount. What should they do? Who do they turn to? Surely not a Labour Government. Those people are in that mess because a Labour Government, who were aware of the problem, did not put in place a regime that would allow the issues to be dealt with properly.
	My hon. Friend the Member for North Southwark and Bermondsey talked about forewarning people of what is coming, and about making provision for a sinking fund, so that people can pay in advance, and know in advance exactly what they have to pay. Why do so many leaseholders find it so difficult just to get the details of the works that are being carried out? Why is the process not explained in a way that they can readily understand?
	If the Minister and the Government are really concerned about council tenants it is about time that they showed it. When we heard that there would be a return to council house building, I thought, I'll believe it when I see it. The problem is that I do not have strong enough binoculars to see that far into the future. Many of the people whom I represent, who live in real despair of ever getting a decent place to live, look to the local authority, the housing association and the Government, not for payment of housing benefit or for dilapidated bed-and-breakfast accommodation, but for a decent answer to a fundamental question. They want somewhere decent to live. The Government have failed miserably, not just over the past 18 months but over the past 10 years. As I have said, the Tories are not blameless either.
	The Minister can look over the Dispatch Box for a smile from his Conservative opponents, as if to say, That's the Liberal Democrats; they are again trying to blame everyone except themselves, but I am a member of the local authority in Portsmouth and I accept my share of the responsibility for not having been able to deal with the housing crisis there. However, we cannot deal with the crisis because our hands are tied and our legs are shackled, and we are, in the main, dealing with someone who does not want to listen, does not want to look at the problem, and is not saying much to lead me to believe that we will get the help that we deserve.

David Drew: I shall be brief because much, if not all, of what I want to say has been said. I am afraid that the Minister will find the tone of Labour Members' speeches monotonous, because many of us will rise to support Labour party policy. That policy has been reaffirmed countless times on the floor in conference, and was spoken of by my hon. Friend the Member for Great Grimsby (Mr. Mitchell). I am sorry that I was not able to hear him speak; I was with my hon. Friend the Minister for Housing, talking about community land trusts, an issue that will come up later. I know that my hon. Friend the Member for Great Grimsby will have waxed lyricalas did my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) and my hon. Friend the Member for Hayes and Harlington (John McDonnell)to make it clear how strongly we Back Benchers feel about the need to resolve the issue.

Lembit �pik: How did the hon. Gentleman feel when he heard the hon. Member for Poole (Mr. Syms)a Conservative Member of Parliamenttrying to persuade a Labour Minister to adhere to Labour party policy?

David Drew: I will not go into how we feel about the Conservatives. The easy way for them to achieve what they want is to summon up the courage to support new clause 8 if it is pressed to a Division, because that is a reaffirmation of Labour party policy. It would be good to hear what the official Conservative line is on that.
	I am proud of the fact that tenants in my local authority area chose, despite every inducement possible, overwhelmingly to reject the idea of selling off the council's stock. They feel that they have been punished as a result. It would be good to hear what the Minister says on that, because I gather that, through new clause 1, the Government are moving towards providing even greater assurances that any ballot will be fair. The ballot held in my local area, admittedly some years ago, was not fair; it was rigged. Local tenants chose to reject the proposal and chose to stay with local authority management of council stock. I congratulated them because I shared that approach to the issue. It is only right that we listen to such tenants.
	As new clause 8 evinces only too clearly, the view ascribed to the Government is that if tenants do not vote to opt out and to go with a private finance initiative project, an arm's length management organisation, or some other form of privatisation, they will be punished in two ways. The first method by which it appears that they will be punished is through money being siphoned off. I face that issue daily, as local Liberal Democrat and Conservative councillors allege that the Government take money from authorities such as Stroud and use it to bail out other authorities. There is an easy way of dealing with that, and I am pleased to see that there are to be various pilots looking at how local authorities can relocalise their provision of local authority housing.
	We are talking about local authority housing, but the great strength of it is that it has always been backed by the Government. Let us not fool ourselves; the whole history of so-called council housing has been about collectivisation and the fairness through which we provided housing for those who could not afford to buy or to find housing through other means. There was a collective underpinning to that policy.

Stewart Jackson: The hon. Gentleman has a distinguished record on discussing such issues on behalf of his constituents. Will he clarify, for the House, whether it his understanding that new clause 1 would fetter discretion in respect of stock transfers? The hon. Member for Great Grimsby (Mr. Mitchell) seemed to be saying that new clause 1 was intended to restrict stock transfers, whereas the hon. Member for Stroud (Mr. Drew) seems to be saying that we want fairness, a level playing field and transparency.

David Drew: I was not here to hear what my hon. Friend the Member for Great Grimsby said, and he is not here to gesticulate at me wildly, so I will have to interpret what he said, which is always a dangerous thing to do when we are talking about my hon. Friend. We are at one in believing that there is role for local authority housing, but I have to say that if my local tenants chose, completely objectively, to find some other owner or manager of their stock, that would be a matter for them. What I object to is the fact that they are always asked to do so with their arms twisted behind their backs and their mouths taped over. They are expected to do the honest thingthat is, to go for something that they do not want. That is entirely unfair. The Stroud transfer process debacle was expensiveand unfair, because the tenants and I had to try to determine who the council tenants were. It was a rigged process; we had to go round to anything that looked like a council house and determine whether to knock on the door and try to put the argument to them. There was no other way to do it.

Kelvin Hopkins: I agree entirely with everything my hon. Friend says, but does he not accept that without the arm-twisting, no sensible council tenant would ever vote to leave local authority control?

David Drew: I agree, and I have to say that I have always found there to be an element of insider trading, because changes tend to be driven from within. Perhaps that is because there is a degree of hopelessness in the local authority housing world, and there seems to be no alternative but to go along that route, but that is not the route that tenants seem to want to take. What happened in my area was a great sadness in my political life because it led to a huge destruction of trust, and that has been difficult to rebuild.

David Taylor: What does my hon. Friend think is the reason for the overt hostility to council house building? In the decade following the election of the Attlee Government 180,000 council homes were built each year, whereas in our 10 years of government we have built a total of 1,800. Would my hon. Friend care to surmise why we are being strangled in this way?

David Drew: I shall take that as a rhetorical question. I have given way so often that what was to have been a very short speech is becoming a very long one, but let me say that I entirely agree with my hon. Friend. I think it is a scar on the face of this Government that we have been so biased against local authority housing that we have failed to solve the housing problem, although there is one obvious way in which we could do so, and it has nothing to do with a monopoly.

John Hemming: rose

David Drew: This is the last time that I shall give way in what was to have been a very short speech.

John Hemming: I am grateful to the hon. Gentleman for giving way at this late stage in his speech. He mentioned the small number of affordable houses to rent, which is a key issue. An organisation in my constituency called Home-Start, which deals with families in crisis, tells me that perhaps half of them are in crisis because of bad housing. Does the hon. Gentleman agree that any attempt by the Government to save money by ensuring that people were badly housed and not funding housing properly would be a false economy, given the wider knock-on problems involving education, children's services and so forth?

David Drew: I do agree. I helped to set up Home-Start, and I appreciate its value as an alternative to Sure Start in the voluntary sector. Bad housing is clearly a large part of the reason why some children are disadvantaged.
	Let me end by raising a matter to which my hon. Friend the Member for Great Grimsby may have already referred. I apologise if he has, but reinforcement does no harm. My hon. Friend the Minister sent my hon. Friend the Member for Great Grimsby a letter, dated 29 February this year. One of its final paragraphs deals with funding for stock-retention authorities that have either chosen not to hold a ballot or chosen not to accede to a decision to sell council stock. It states:
	You will know that we have been very clear that there would be no additional funding for those authorities.
	A degree of unfairness is involved, as funding is provided by the private sector. In the next paragraph, my hon. Friend the Minister states:
	The vast majority of retention authorities are on target to meet the Decent Homes standard by 2010.
	That is absolutely true, which is why it seems unfair that we have been forced to accept the ballot route. The letter continues:
	Many of those who have homes that will not be made decent by 2010 are not 'struggling'
	that is, in need of a sell-off to meet their losses in income
	but are seeking to realise greater benefits by re-profiling their work (and meeting the target at a later date), possibly by integrating the work into wider regeneration ambitions.
	I ask my hon. Friend to explain to us how that can work. Authorities like mine, in rural or semi-rural areas, will not necessarily have easy access to major regeneration schemes, but may expect their stock to reach decent homes standards by 2010. Such authorities may be at their wits' end over how to deal with their potential losses, which were initially caused by housing benefit unfairness but which, nowadays, have more to do with the siphoning off of rent income. What future do they have? They want to hear from the Government, whom they have stuck with. They have not opted for alternative solutions, and they are keen to see new build which will replenish local authority stock.
	That seems to be where the Bill is taking us, but we want to hear some concrete facts from the Minister. If he tells us how what we want to happen can be made possible, we may not have to press new clause 8 to a vote, because our Government will have listenedfollowing resolution after resolution. The new clause is linked to new clause 1, in that if it came to a ballot in the future, at least there would be a level playing field for tenants in respect of who they wanted their owners and managers to be.

Lembit �pik: Let me begin by giving the Minister some support.

Iain Wright: Or some stick!

Lembit �pik: No. The carrot comes before the stick.
	New clause 11 stands, somewhat incongruously, at the centre of our present debate. As the Minister said earlier, and notwithstanding my complaints about the shortage of time, the Government have taken account of a number of points that were raised by Members on both sides in Committee. It is perhaps ironic that the Government new clauses and amendments in this group are, on the whole, uncontroversial and rather positive. I know that a number of housing organisations are encouraged by the fact that this Minister in particular has demonstrated a willingness to listen, which is to his credit. We are in the happy position of being able to praise him for the amendments that the Government have tabled so far. [Hon. Members: But?] Butthe rest of the picture may not be quite so rosy for the Minister.
	The need for amendments Nos. 14 and 15, tabled by me and by other Liberal Democrat Members, was brought to my attention by London Councils, an organisation of great standing that examines these matters in an objective and business-like way and seeks to add value to the Bill in that spirit. The amendments would do something very simple: they would protect both tenants and local authorities from having to pay any additional moneys after the completion of the sale of a right-to-buy property should it turn out that the valuation might not have been right at the outset.
	As aficionados will know, the Bill will put in statute the ability to correct an incorrect statutory determination of value and replace it with a correct determination, as long as that is done within 42 days. On the whole, London Councils and other organisations welcome that. The problem here is that there is no restriction preventing the revaluation from taking place after the completion of a right-to-buy sale. To put it simply, an individual can buy a property and then discover that it is subject to revaluation.
	As I am sure the Minister realises, that arrangement is potentially unfair, as people acting in good faith could be landed with an additional bill. I hope that, on reflection, he will either accept the amendments now or assure me that he will seek to introduce amendments containing exactly the same wordsor, if he feels that it is better to save the Government's face, almost the same wordsin another place. If he cannot give such an assurance, I may be inclined, in the light of what he does say, to seek separate votes on amendments Nos. 14 and 15.
	That is all that I really need to say about the amendments. They are self-explanatory, and I cannot see for the life of me why they should evoke a partisan response, or anything less than agreement from the Minister that, in principle, this is a sensible suggestion. It is in the interests of the general public and individuals who are involved in right-to-buy purchases in good faith. It does not compromise any intent of the Bill, or any value or policy statement made by the Government at any time in the past.
	Finally, let me deal with what are self-evidently the most controversial elements of the Bill. In a lucid and erudite speech, the hon. Member for Great Grimsby (Mr. Mitchell) laid the ground for consideration of the key subject in this part of the Bill. Explanations of new clauses 1 and 8 have already been given, and need not be repeated. However, I think it worth drawing attention to the passion with which Conservative, Liberal Democrat and Labour Members believe that these provisions are entirely consistent not just with the interests of housing policy, but with specific housing commitments made by this Labour Government during their time in office.
	The hon. Member for Great Grimsby has felt so strongly about certain subjects in the past that he has renamed himself Mr. Haddock in order to stick up for fishing; perhaps on this occasion, he may wish to change his name to Mr. Housing, as he seems no less passionate about this subject than he was about fishing in his earlier campaign. The rest of us fall behind him, as, once again, this issue is shown to be a cross-party concern.
	My worry is that the Government, as the hon. Member for Poole (Mr. Syms) implied in his interesting contribution, are using economic drivers to push forward a dogmatic agenda that assumes that a particular outcome is so desirable that they will bribea word that others have usedlocal people and to some extent local authorities to achieve that result. Why? Why use macro-economic tools to cause micro-economic effects in local governments? In non-jargonistic terms, why are the Government so certain that driving housing out of the council sector is a good thing that they are willing financially to incentivise that policy to the point where many local authorities will shrug their shoulders and say, What are we supposed to do? They wonder what they can do to protect themselves when the Government are throwing hundreds of millions of pounds towards a specific policy outcome.
	I encourage the Minister to respond to the hon. Member for Hayes and Harlington (John McDonnell), who rightly said that the existing circumstances in which housing stock remains under local authority control directly fulfils Labour's policy objectives. Will the Minister therefore explain to him and to the hon. Members for Stroud (Mr. Drew) and for Poole, my hon. Friend the Member for Portsmouth, South (Mr. Hancock) and myselfnot to mention others who are yet to speakwhat exactly it is that the Minister can see that we cannot? What is it that compels the Government to use those colossal amounts of money to enact such a ground shift in how we manage housing policy in this country?
	Another worrying point, already raised by others, is the lack of investment in council house building. With the number of homeless estimated at 100,000it could be substantially higher as there is an awful lot of hidden homelessness in this countryit is quite obvious that we have a housing crisis. Another compounding factor is that, as far as I can see, the Government's policy, which is challenged by new clauses 1 and 8, is directly responsible for sapping investment from rehabilitating existing housing for council use in order to construct new housing.
	The hon. Member for Hayes and Harlington and others have pointed out that the average inflation rate for house prices is around 9 per cent., but in poorer areas, it is often a lot higher. A few years ago, house inflation in the less wealthy areas of my own constituency of Montgomeryshirein Wales admittedly, so it may not be directly affected by this legislationstood at 36 per cent. It compounds the offence of poverty when councils cannot ease housing demand because they do not have sufficient resources to tackle the problem.
	One of the great culprits has already been mentionedthe housing revenue subsidy system. I will not say much about that, but should my hon. Friend the Member for Chesterfield (Paul Holmes) catch your eye, Mr. Deputy Speaker, you would find that he is a true expert on the subject in a way that I am not.

Iain Wright: Hear, hear.

Lembit �pik: The Minister violently agrees with that assessment. My hon. Friend, in common with others who have spoken, has made it quite clear that the Bill's provisions will make things even worse. It amounts to taking money away from less wealthy areas and giving it to what can easily be perceived to be more wealthy areas. Given that dynamic, it is almost incomprehensible to us or other people who believe that the Labour party is in favour of redistributing wealth to hear the Government defending something that increases the disparity. In a sense, we could say that the subsidy is redistributive: it takes money from poorer people and gives it to the more wealthy. I thus challenge the Minister, particularly after he has heard my hon. Friend the Member for Chesterfield and others, to explain why the Government have been so unwilling to right a wrong that is felt across the country. If the Minister really wants to redistribute wealthor, to be more precise, to give funding support to the councils that he believes most need ithe should not implement a system that redistributes wealth from one set of tenants who are already badly off to another set of tenants, as that process amounts to redistributing poverty.
	My hon. Friend the Member for Portsmouth, South, the hon. Member for Stroud and, indeed, the hon. Member for North-West Leicestershire (David Taylor) have reflected on why it has been so difficult to achieve a house building rate of more than 1 per cent. of the level of house building that occurred shortly after the second world war. There is a fairly simple reason for that.

David Taylor: On a point of clarification, the situation is worse than that. The average number of council houses built annually for decades after the election of the Attlee Government was, as I said, 160,000. However, 1 per cent. of that1,600is the total number built over the last 10 years, so the real figure is one tenth of 1 per cent.

Lembit �pik: Indeed. As the hon. Member for North-West Leicestershirea Labour Memberpoints out, on the basis of the real figures, I was being 10 times too generous. I was blaming the Minister for only a tenth of the problem for which he is partly responsible, albeit not personally. Despite my concerns about Government policy, when the hon. Member for Great Grimsby suggested that the Minister was in some ways a role model for Robert Mugabe, I thought that that was pushing it a little bit too far. I cannot say, however, that I have detailed knowledge of the current council house building programme in Zimbabwe. The hon. Member for North-West Leicestershire is completely right: the true rate of house building in the past 10 years stands at 0.1 per cent. of the level achieved during a sustained period after the war.
	There is a partial explanation for the difference. The Government and the people of Britain made a great sacrifice in order to improve the housing stock; I shall not go into the full historical details, but it is worth noting the interesting set of priorities that were determined after the war. Some mitigating circumstances have been evident in the past 11 years, but given that the Government promised a colossal house building programme, they need to explain how they intend to achieve that when they are putting together economic strategies that will militate against that outcome.

Paul Holmes: I do not want to let the Government off the hook too easily there. There was a huge peak in building during the few years shortly after the warnecessary to tackle the bombed housing and all the rest of itbut the point stands good for 50 years. Over the 50 years since world war two, the average council house build per year was 150,000 a year as compared with the tiny number that we have seen built over last 11 years.

Lembit �pik: My hon. Friend makes a good point. Perhaps the Minister is getting some sense of the cross-party concern on this matter. Even if he were to close his ears to hon. Membershe is not the sort of Minister to do thathe would need to remember that the Government themselves have set house building targets comparable to the sort of figures highlighted by the hon. Member for North-West Leicestershire and by my hon. Friend the Member for Chesterfield. The Minister needs to explain to all of us why he and the Government have been comfortable with a system that militates against incentivising local council house building by local authorities.
	Let me conclude with some good news. There is a way out for the Minister, who is looking for solutions. I can present him with a very simple solutionto accept new clauses 1 and 8. Those new clauses are not rocket science and they do not contradict anything that the Government have said that they want to achieve. No great philosophical dilemma would be posed for new Labour by adopting those new clausesafter all, it is not clause IV, in the historical context of the wordso the Minister could make progress on a cross-party basis that sent all the right signals to local authorities. He should indicate his willingness to respond to what we are all saying: we are not saying it for any party political advantage, as it is also what local authorities of all political parties are saying to the Government in their efforts to resolve a desperate shortage of affordable housing across the land.
	My hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) has given the Minister a feast of opportunitiesmany new clauses and amendments to acceptto improve the situation still further. I would be satisfied if the Minister were to explain his willingness seriously to consider amendments Nos. 14 and 15, which I described before, and to accept new clauses 1 and 8, which are very robustly phrased. There is no technical reason why they could not be absorbed into the Bill. As the Minister has heard, there is a robust logic to accept them to achieve the very goals that the Government seek.
	In fact, Mr. Deputy Speaker, I hope that you will allow us to press new clauses 1 and 8 to the vote if the Minister indicates an unwillingness to accept them. If he is willing to accept such provisions and promises that they will be included in the Bill at a later stage, we will accept that in good faith. However, most of all, we would like him to say that he has listened to the arguments and to show the courage that any Minister who really cares about the issue should have and say, I will accept them. Failing that, we hope that if they are pressed to the vote, he will encourage Labour Members to vote aye. If he does that, it is no loss for the Government; it is a victory for scrutiny and, moreover, a great credit to the Minister and the Government for showing that they care more about solving a desperate housing crisis in this country than they are concerned about having things their own way at every stage of the Bill's consideration.

Nick Raynsford: I start by agreeing with the hon. Member for Montgomeryshire (Lembit pik) on his opening remarks, in which he rightly praised my hon. Friend the Minister for introducing sensible amendments in response to debates in Committee. The hon. Gentleman's recognition of the Government's willingness to listen and respond positively was welcome and in rather marked contrast to the comments of the hon. Member for North Southwark and Bermondsey (Simon Hughes), who was rather churlish in his approach to the issue. However, I disagree very profoundly with most of the other comments made by the hon. Member for Montgomeryshire and, indeed, those of most of the other contributors to the debate this afternoon. It strikes me that, when there appears to be consensus, as there appears to have been in the House today, it is often an occasion for ringing alarm bells. I want to ring a few alarm bells now.
	I have to tell hon. Members that the inheritance that the Government received when they came to office in 1997 was indicative of things that were in many ways fundamentally wrong with housing policy. Not only was there the huge legacy of substandard council housing that was in urgent need of improvementthe funding for that improvement has been quite rightly a fundamental part of Government policy in recent years, and we will return to the details of that in a momentbut there was the pernicious legacy of years in which tenure had been allowed to dominate the debate and politicians had argued the merits of tenure as master rather than the interests of the public for whom tenure should be the servant. So we had debates about the merits of owner-occupation, which obsessed the Conservatives at the time, in just the same way as we have heard rather an obsession about the merits of council housing as against social housing more widely. I believe that it is fundamental that we should think of tenure not as the master but as the servant and that we should try to provide a framework where people can opt for an appropriate tenure suitable to their needs and resources at different stages in their lives, without being trapped, as too many people have been in the past, in unsatisfactory and undesirable circumstances.
	The consequence of the obsession with tenure was that, for 50 years or more, we allowed all housing development in this country to be divided and polarised in a rigid and ultimately socially destructive way. We had estates that were almost exclusively owner-occupied on one side and estates that almost exclusively comprised social housing on the other, and ne'er the twain did meet. That led to all sorts of problems. A lot of the market housing provided for owner-occupation was built wholly unsustainably, with people gobbling up acres of green space, seeking detached houses in rural settings. Of course, that created the concept of concreting over the countryside, which has become a rather significant issue in the debate about how we meet housing need. A lot of the opposition to new housing is exactly the product of poor-quality, insensitive housing development, gobbling up the countryside, particularly in southern Britain, over many decades. The Government who were in power in the 1980s and early 1990s were fundamentally at fault for allowing that to proceed.

David Taylor: My right hon. Friend, whose knowledge and reputation on this subject are without parallel in the House, rightly points to the fact that tenure tended to dominate debate and that the interests of the tenant were not paramount, but is it not even worse dogma for a Government to deny the possibility of local authorities having any part to play in resolving the problems of affordable housing by undertaking the provision, management and maintenance themselves?

Nick Raynsford: If that were the Government's policy, I would agree with my hon. Friend; but it is not their policy, and as I shall demonstrate in a moment, the right approach, which they are broadly following, is to pursue a policy that supports the provision of social housing by a variety of providers, so that there is both diversity and some competition to avoid the problems of monopoly, which became a serious problem in the 1970s, 1980s and early 1990s, when very large council housing estates were run by authorities that found them difficult to manage in many cases and that were opposed to the concept of stock diversification for ideological reasons. I do not think that that is part of the solution; I want a pragmatic approach that accepts the need for local authorities to play a positive role but not a monopoly role, and I would not want to see a return to that.

Stewart Jackson: Surely the right hon. Gentleman is being somewhat churlish about, for instance, my right hon. Friend the Member for North-West Hampshire (Sir George Young), who did a lot to push forward a plurality of providers in the period of the Conservative Government up to 1997tenant management organisations, housing action trusts and other initiatives were developednot just a monolithic approach to social housing.

Nick Raynsford: If the hon. Gentleman had waited a little longer, he would have heard me say some very nice things about the right hon. Member for North-West Hampshire (Sir George Young), whose period as Housing Minister was distinguished in a number of ways, even though I am afraid it coincided with the Conservative party adopting planning policies that had the effect that I was describing: to polarise areas of owner-occupation and of social housing, and to allow unsustainable development which, frankly, gave development and housing a bad name in many parts of the country, the legacy of which we still live with today.
	If we consider some of the other adverse consequencesthe concentration of too many poor people in areas of exclusively social housing, where a geographical concentration of poverty and disadvantage inevitably resulted in some degree of stigma, and the extent to which the standards of energy efficiency in both public and private housing were woefully short of the standards that we now recognise are necessarywe can see pretty clearly the scale of the problem that had to be addressed. The Government's initial approach in saying that the first priority must be to tackle the backlog of substandard council housing was correct. It would have been nice, if there had been more resources, to expand the new build programme as well, but the priority was to put an end to the scandal of millions of people living in substandard housing in which they had been neglected and left for decades because of a lack of investment.
	There was some increased public investment, but the Government recognised that there would be no possibility of achieving the consequences that were set out in the decent homes programme of improving the entire social housing stock within a finite time without the injection of some additional private finance. That is where the stock transfer programme, which began when the right hon. Member for North-West Hampshire was Housing Minister, has played an important role. As I have said already, we should not approach these issues in an ideological or dogmatic way; we should consider the interests of the tenants and see what the outcome has been. If we look objectively at the evidence, we see that it is not as it has been presented to the House today, with tenants universally opposed to stock transfer. There has been a mixed view. Some tenants are opposed; others tenants have welcomed it. The evidence where stock transfer has taken place is that, in general, there have been huge improvements in the condition of the stock and high satisfaction among a large proportion of the tenants concerned. I take the view that we should listen to that, rather than to the views of people who want to put tenure ahead of the interests of the public.

Simon Hughes: Does the right hon. Gentleman accept that the picture is mixed, in that tenants in different places can have different views? In my borough and in other areas, whenever people have been asked they have been very clear that they want to be able to remain as council tenants. When the people and the parties represented on the council in question clearly express that wish, the Government should permit that and not give any financial disincentive for it to remain the position.

Nick Raynsford: I agree that the position varies from area to area, and that Government should listen to the views of tenants, but it is also right to consider the merits of diversification to avoid large, monopoly landlords, which can be problematic. In my area, the local authority in Greenwich still retains the bulk of the housing stock, but it has agreed stock transfer in a particular area, which has led to a huge improvement in property conditions and a higher level of tenant satisfaction. Such a mixed approach is admirable and sensible, and it should be part of the solution. That is why I reject the approach implicit in new clauses 1 and 8. They adopt a back to the future attitude of saying, We simply want to return to a framework of council housing, and not to accept that there is a need for a pluralist world.

Lynne Jones: My right hon. Friend talks about an injection of private funding as if that is somehow cost-free. Is not the truth of the matter that such an injection of private money costs the public purse more than publicly funded capital investment? It is right that we should invest in the decent homes programme, but even thatlet alone the new-build programmehas been woefully inadequate; certainly in Birmingham, thousands of homes have been demolished. So, not only have we not been building new homes, but we have been demolishing council homes, which has led us into this terrible housing and homelessness crisis.

Nick Raynsford: I am certainly not going to defend the housing record of Birmingham city council, which is very unsatisfactory in many respects. However, my hon. Friend is wrong to suggest that the cost of bringing extra private money into the decent homes and stock improvement programmes is greater than the cost of providing public money. On the contrary, 35 billion has been raised for housing investment because housing associations are able to borrow from the private sector to supplement the public funds that are available to them. That is extra investment that has improved many homes that would not otherwise have been improved.
	Also, contrary to the view that is often expressed, tenants' interests have been protected. The idea that housing associations are unaccountable and irresponsible landlords is very different from my experience. I have worked with a range of housing providers, including small and large housing associations, and most of them achieve high standards and aim to be truly responsive to the needs of their tenants and the communities they work with. I strongly advocate an approach that recognises the merits of a mixed economy with a range of providers, and a programme that allows the continued attraction of private investment to supplement public funds, so that we get a larger programme and more work done than would otherwise be achieved.
	That must be applied more widely. There has been a dramatic change in new private house building development: unlike 10 years ago, house builders are now prepared to accept that new developments should be mixed developments with an element of social and affordable housing alongside market housing. That was not the case in the past. How often in the past did we hear private developers saying, We simply want our own exclusive estates, with no social tenants? That pernicious and wrong approach has largely been countered by the policies pursued by the current Government, and I hope that they will be maintained. The thinking in the Green Paper published in the summer, which is implicit in the policies advocated in the Bill, is encouraging mixed developments in which, side by side, there will be housing for sale, housing for rent and low-cost and intermediate options, and in which there will also be a commitment to raising energy efficiency standards and to doing so in new ways. If we pursue that, and we also accept the need to bring in an element of private finance, there will be an expanded programme, which is what we all want.
	I hope that my hon. Friend the Minister will reject the blandishments of those who advocate new clauses 1 and 8, and that he will continue on the course the Government have pursued, which is the right one in the long term for this country.

Adam Price: I rise to add my voice to the polyphony of support from all parts of the House for new clauses 1 and 8although not a monopoly of support, as we have heard a discordant note from the right hon. Member for Greenwich and Woolwich (Mr. Raynsford). Members of four parties have, however, supported new clauses 1 and 8. I do not see in them an almost Stalinist nostalgia, which is the picture that the right hon. Gentleman painted. They are in favour of a mixed economyof a social democratic principle, which I would have thought the right hon. Gentleman, a former Minister, would have found it in his heart to support.
	It is true that mistakes have been made in relation to council housing. However, when I compare those mistakes with the achievements made through council housing in the 20th century, I still feel that it should be part of the iconography of the Labour party, alongside the NHS, because council housing did as much as the NHS in that century to improve public health. The under-investment in council housing was as nothing to the abuse and suffering that working-class people had to cope with from private landlords before the council housing movement gathered pace, initially at local level and then through the 1945 Labour Government.
	The amendments attempt to maintain some space for council housing. The hon. Member for North Southwark and Bermondsey (Simon Hughes) referred to the first council house that was built. If things continue in the current way, we might see the last council house.
	The picture in Wales is depressingly similar to that in England. We have partial devolution, but the model of housing finance is governed by primary legislation in Westminster and rules set by the Treasury. Although the political consensus in Wales is generally to the left of centre and is overwhelmingly in favour of retaining a strong role for council housing, more and more local authorities are being forced down the route of transferring their stock.
	The hon. Member for Merthyr Tydfil and Rhymney (Mr. Havard) is present. Only last Thursday, there was a knife-edge vote in Merthyr Tydfilthe closest yet in Wales. With people voting by text message, there was still a majority of only 14 in favour of stock transfer, even though they were promised 2,000 new bathrooms, 2,500 new kitchens and so forth. Those are the kinds of inducements that are repeatedly offered to tenants, yet the votes are always close. In Conwy, there was a 51 per cent. to 49 per cent. decision, despite the same kind of financial pressure, which leads the tenants to decide there is no future in the local authority housing sector.

Dai Havard: As the hon. Gentleman has mentioned my constituency, may I just say that while much of the provision in the Bill does not directly apply, it sets a background against which the Welsh Assembly has to operate, both ideologically and practically, in terms of local government expenditure? I ask the Minister to recognise that if his proposals are not amended, they will put local authorities in an invidious position, and all the amendments do is ask him to take them out of that invidious position and give them the freedom to have plurality in their provision.

Adam Price: I wholeheartedly agree with the hon. Gentleman. I do not wish to embarrass him politically by saying that, although I suppose we are now in coalition in Wales. The Housing Minister in the Welsh Assembly Government is a Plaid Cymru Member, and in a few weeks' time she will have to confirm the decision made by the people in Merthyr, despite the fact that she is a strong supporter in principle of local authority housing.

Lembit �pik: As there is a coalition in Wales between Labour and Plaid Cymru, what does the hon. Gentleman imagine the position in Wales will be when they consider the outcome of this proposed legislation? Does he think Labour Members there will be persuaded by the arguments put here to reject new clauses 1 and 8, or that they will take a divergent view based on common sense rather than dogma?

Adam Price: I do not have a crystal ball to give me greater understanding of the views in the Labour party in Wales, but the broad political consensus among its members and activists, as well as those of Plaid Cymru and the Liberal Democrats in Wales, is in favour of maintaining a key role for local authority housing. As a result of the same financial pressures that we see in England, Labour-controlled Rhondda Cynon Taf county borough council initiated a ballot that was successful in transferring its stock, and Swansea's Liberal Democrat council initiated the ballot referred to by the hon. Member for Great Grimsby (Mr. Mitchell), despite the fact that the Liberal Democrat membership is probably against it. I suspect that Plaid Cymru's Gwynedd council feels the same financial pressures. It undermines people's faith in local democracy when the majority of the political partiesthe Conservatives in Wales are the exceptionare against stock transfer in principle but are being corralled down such a route because the financial cards are stacked against them. The two proposals merely seek to create a level playing field in the information provided to tenants in ballots and in the system of housing finance, so that people can have a genuine choice.
	I support plurality. In my area, the pattern of council housing was different, because its estates were smaller and thus did not have the attendant problems that have been mentioned. If there is a case for plurality, let us embrace plurality, but that is not the road along which we are accelerating. We are moving towards an end to an historic and important central role for local authorities, which are democratically accountable, in providing housing to their constituents.
	Competition between providers is not the only way to drive up standards; I cannot ascribe to the Blairite mantra. There are other ways to drive up standardsdemocracy and politics. If people are unhappy at the standard of housing in their local area, they have an option where there is council housing. That option is the local elections, because people can vote in another party. What option will people have when there is an indirect and convoluted system of accountability? What right will future generationspeople who are not current tenantshave to hold their local political leadership to account about what it is doing locally on housing and homelessness?

John McDonnell: There is no accountability for many of my constituents, because they are so desperate in their homelessness that they are forced into private letsbuy-to-let properties garnered by profiteering landlords on a Rachmanite basis to exploit the housing benefits system. When housing is in such desperately short supply, democracy, competition or co-operation do not work. This is about housing supply. The numbers that we are supplying at the moment are clearly inadequate. Tonight, we are offering one of the vehicles that could meet that housing supply need. Whether or not there is plurality of provision, we know of one area in which we can develop housing with one vehicle. It can provide an acceptable form to the people who will then eventually be housed and it has delivered for us in the past: council housing.

Adam Price: I fully agree with the hon. Gentleman. I have seen the figures for England. I do not believe that a single council house was built in Wales last year. If Plaid Cymru is successful in regaining control of the authority in Caerphilly, we will be committed to having at least some council housing built next year. It would be great to have some positive competition from the Labour party on thatperhaps we could have a bidding war on the number of council homes we will build. That is the kind of political competition from which people would benefit.
	By accepting the new clauses, the Minister would signal that the regime under the new premiership is serious about its commitment to having a council house building programme that would matter and make a visible and significant impact

Paul Truswell: Is that not the crucial point? Even if we are talking about a plurality of provision, 2,500 council houses a year is a pathetically small share of that plurality.

Adam Price: The hon. Gentleman is right. As the hon. Member for Great Grimsby said, the Government's study, based on the pilot for self-financing, has laid the facts bare for us. Unless a new system of finance is in place, even the Bill's new rules will not allow us to transform the parlous lack of investment in the council housing sector that we have seen for so many years. The Minister and a new Prime Minister have the opportunity to put right the mistakes made by a previous Administration and a previous incumbent.

David Taylor: The hon. Gentleman was talking about accountability. Is not a pitiable deception often peddled during the run-up to coerced stock transfer ballots? It is said that there will be accountability from or to the new housing associations, which are typically comprised of the great and the good, some nominated local authority members and some nominated tenants, but in practice people are hobbled, silenced and constrained by what they can say in public because of the fear of ejection from the housing association for bringing it into disrepute. That is the sort of accountability that people are promoting.

Adam Price: I agree with the hon. Gentleman. Clearly there are means of deepening tenant participation in all different models of tenure, but there is a model of accountability that people readily understandthe ballot box and local electionsand we should retain it.
	We are entering into a different phase in more general terms. After the Northern Rock fiasco, the ideological position that public sector equals bad and private sector equals good is completely tarnished. We are also entering into a new financial era. People in the United States of America are talking about 10 days that have changed capitalism, because the private sector is no longer awash with the kind of money to which the right hon. Member for Greenwich and Woolwich referred. There was a demand for bonds and asset-backed securities, and that is one of the reasons why stock transfer and the kind of financial instruments that it could create were attractive to investors at one point. We are now in an entirely different erathe credit crunchand we should not put our faith in the private sector when the money in it is drying up. We must examine other models that have served us well in the past. When facing such a housing crisis in this country we would be unwise not to grasp this political opportunity, given that there is such a consensus in this Chamber on the fact that council housing needs to be a far larger part of the solution than it has been for the past 10 or 15 years.

Paul Holmes: The fact that I wish to address my comments to new clauses 1 and 8 will come as no surprise, given that almost everyone who has spoken has done the same. Those new clauses have dominated the debate. This group contains more than 21 new clauses and amendments, and those two alone have taken up well over 90 per cent. of the discussion. That shows just how strongly people feel about this matter.
	The right hon. Member for Greenwich and Woolwich (Mr. Raynsford) discussed dogma about tenure and whether people should be buying houses or living in council houses, saying that that was not the key issue. One of the key issues is that the 11 years of dogma from this Government, saying that council housing is bad and that it must be forced into privatisation or stock transfer, has caused huge harm. I shall return to that in a moment.
	New clause 8 concentrates on effectively establishing the fourth optionor a level playing field for councils alongside housing associationsand has two parts to it. The first is about equal access to resources to maintain existing housing stock. The second is about equal access to funding and borrowing and being allowed to build new houses. Like new clause 1, new clause 8 stands in the name of the hon. Member for Great Grimsby (Mr. Mitchell), who does an excellent job as chair of the all-party group on council housing. The second name listed is mine, as I am vice-chair of that group. Given the excellent speeches that we heard from the hon. Members for Poole (Mr. Syms) and for Carmarthen, East and Dinefwr (Adam Price), I look forward to having two new vice-chairs for the group so that we can turn it into a fully fledged all-party group.
	I have no doubt that at the end of the debate we will hear from the Minister that all these issues are being considered and are under review. There is a review of the housing subsidy system, to which I shall return shortly. We have heard that from Ministers and the Government before. Members of the Labour party have heard it at conference. They heard it in the run-up to the 2005 election. They heard it last summer, in the run-up to the general election that never was. They heard promises that the Government were looking at the problem and would sort it out, and that they would allow councils to have a level playing field and to build. As many hon. Members have pointed out, that is nonsense, and that has been the case for the past 11 years. The dogmatic thrust of Government policy is to bring an end to council housing. Those council tenants who vote against Government policythat is, more than half the social housing tenants in the countryare penalised and punished.
	It is no good the Minister saying that he is looking into the matter, that there is a review and that the Government will come up with some answers next year, the year after that or maybe the year after that. We have heard it all before and it has not happened. The crisis is now. We all know what is happening in the private housing sector: repossessions are soaring and have almost reached the levels they were in 1990 during the last big negative equity crisis. People who bought in the sub-prime market or who are on three-year fixed interest mortgages and will come off them on to a much higher interest rate will begin to hit problems. The crisis will be much worse than the one in 1990 to 1992. After that crisis, the Conservative Government altered the regulations so that the benefit system no longer paid the interest on a mortgage for the first six months of unemployment. More people will be pushed straight into repossession, homelessness and seeking help from councils.
	Councils will not be able to provide that help because of the lack of council house building over the past 11 years. For the 50 years following world war two, the average number of council houses built was 150,000 a year, as we have heard. Last year, fewer than 300 were built, the lowest number since before world war one. Councils are not in a position to meet the high demand, which will grow over the next year or two because of the problems that are hitting the private housing market.
	As we have heard, waiting lists have soared over the past 11 years. Homelessness is up from 40,000 to 80,000. Waiting lists for council housing are up from 1 million to 1.6 million. In Sheffield and Chesterfield, waiting lists have trebled since this Government came to office. When the all-party group held its second evidence session a couple of weeks ago, a Labour councillor from Bolsover told us that someone who applies for council housing in Bolsover has to wait an average of 10 years before they can get any sort of quality accommodation. The old lady rattling about in a family house, whose husband is dead and whose children have grown up and left homethat is the normal pattern that I see in my surgery most Friday afternoonscannot cope with the house, the stairs or the garden and wants to move out to a bungalow, but no bungalows are available because councils are not allowed to build any more. They cannot provide that replacement accommodation.
	Every Friday at my surgeries I see young families who live in poor private accommodation and are being exploited, who are sleeping on relatives' sofas or who live in upstairs flats that are council property. They say that they have one or two children and ask when they can move into a house with a garden. The answer in Bolsover would be that they have to wait 10 years. The situation is much the same in Sheffield, Chesterfield and hundreds of other local authorities.
	The crisis is here now. It is bad, but it will get much worse as we encounter further problems with the private housing market. In 1990, councils still had some capability to respond to such situations, but now they will not be able to respond to the growing problem. That is why the Government must do something today. They should accept the new clauses, rather than tell us that the subject is under review and make promises for the future. We have heard that for 11 years but nothing ever happens.
	The housing associations, to which the right hon. Member for Greenwich and Woolwich referred in such glowing terms, have not filled the bill. They were supposed to be the alternative and to meet the shortfall in what councils provided before. Over the past 11 years, housing associations have built 22,000 social housing units a year. The Government's reports have said that at least 46,000 are needed a year simply to allow the situation to stand still. That would not improve the 1.6 million waiting lists, but would simply keep up with right-to-buy losses, for example. The housing associations, which were supposed to be the great answer to all our problems, have managed to provide a pathetic 22,000 social houses a year, which does not even keep up with the right-to-buy losses.

Kelvin Hopkins: I agree with hon. Gentleman. Does he accept that many housing associations now amalgamate into larger groups and no longer have a local, specialist focus? At least one big housing association has a chairman who aspires to be quoted on the stock exchange. He wants the association to be a property company and a big private landlord.

Paul Holmes: I thank the hon. Gentleman for that point, which was next in my scribbled notes. In the shotgun wedding ballots about which we have already heard, which are the subject of new clause 1, people are told that their friendly local housing association will come in and provide many wonderful innovationsmany of which do not happenand that the housing association is small, local and friendly. What happens? That process is followed by constant amalgamation. We can see from the experience of the past 11 years that those housing associations are not in the business of building houses or providing a friendly local service. It is one constant story of amalgamation.
	The business plan of housing associationsI will be corrected if I am wrongseems to be based on constant merger and on taking over council housing stock and smaller housing associations. Two or three housing associations operate in my constituency, and their head offices are in cities that are miles away. They have little local offices that are open a couple of afternoons a week, if we are lucky. If I contact them, as an MP, or a councillor contacts them, we get answerphones or end up ringing through to Rotherham, Bradford, Leeds and all sorts of places. They could be on the other side of the moon as far as the tenants of Chesterfield are concerned.
	When those properties belonged to the council, all people had to do was walk for 10 minutes or take a bus for a few minutes into the town centre. They could then bang on the door and go to see the council housing department. They could also vote the council out, as we were reminded earlier. That enabled those tenants to get some sort of response.
	A large chunk of this Billthe clauses that we might not get on to because of the time constraintssets up the housing regulator, Oftenant. Most people agree with that because, contrary to what the right hon. Member for Greenwich and Woolwich said, housing associations have a poor record of relating to their tenants and being accountable. Housing associations have not delivered the alternative in the wonderful mixed market that we have heard so much about. They have almost completely failed to fill the gap.
	New clause 8 asks for a level playing field. All we want is the same treatment as housing associations have. If the 10,000 council tenants in Chesterfield were to switch to a housing association, that association would immediately get to keep all the rents. If they vote to stay with the council in Chesterfieldtenants in Camden did that four times last yearthe council loses millions of pounds in rent: 3 million last year, 4 million this year, and 5 million next year. The sum is going up constantly by inflation plus, but the plus goes straight to the Government and not into housing in Chesterfield.
	Tenants who are with the council rather than the housing association have no access to the social housing grant. They cannot borrow money. The Minister is very pleased about that. In the letter to the hon. Member for Great Grimsby, which has already been referred to and which was dated 29 February, the Minister makes a big point on the first page:
	A public body borrowing from a bank is still taking on new public borrowing.
	The Government do not want public bodies borrowing. No one has explained that theory of economics to me, whether it concerns hospital wards, new schools or housing. Why do council tenants have to pay higher rents so that people can borrow money in the private sector to build a house? Why is that good, whereas if the council borrows the money more cheaply as a large public institution, that is bad? I do not understand the logic.
	We are asking for a level playing field. The fourth option, which is a short-term provision, does not give councils special privileges. It merely stops discrimination against nearly 2.5 million council tenants who have voted no, sometimes three or four times, and want to stay with the council. If the Government are in favour of mixed tenure, diversity and democracy, surely they want to offer a level playing field rather than condemning 2.5 million council tenants in Conservative areas such as Poole, in Plaid Cymru areas, in Labour areas and in Liberal Democrat areasin areas across the country and the political spectrumto a constant spiral of decline. The only answer that the Government ever come back with is that there will have to be another ballot, and another 500,000 blown on a failed ballot intended to force people to opt for a transfer. That is simply not acceptable.
	The hon. Member for Great Grimsby went into some of the details of new clause 1, so I shall not repeat them. It is essentially about tenants' ballots, and the fact that they should be fair, open and democratic. One question asked from the Conservative Front Bench was whether, if we support the new clause, it means that we are aiming to prevent stock transfer. It means that only if having a fair, open, democratic free ballot stops stock transfer.
	The right hon. Member for Greenwich and Woolwich said that a couple of million tenants have voted for stock transfer, but in most cases that was only because they had a shotgun to their head. They had no choice, because they were being told, You either transfer or your houses fall apart around your ears, and you will not get any new ones built. If you transfer, it will be the land of milk and honey. The ballots that took place were often rigged, as I shall explain in a moment.

Mike Hancock: During my hon. Friend's comments, the former Housing Minister, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), was shaking his head in disbelief, as though he did not believe my hon. Friend when he said that tenants have been forced into voting for stock transfer by the options put before them. I assure him that for us in Portsmouth, the options were very much as my hon. Friend described. I am delighted to say that the tenants did not fall for it, and I would be delighted if my hon. Friend allowed the right hon. Member for Greenwich and Woolwich to intervene on him to say where tenants have embraced transfer wholeheartedly, because they have been so disappointed.

Paul Holmes: I would be delighted to do so. Of course, it is hard to prove in some ways, because if tenants have voted to transfer, how can we prove why they did so? In one case, the district auditor examining such a ballot said:
	I find the publicity material in question was unbalanced, one sided and misleading. I find as a fact that the publicity material constituted persuasion and was issued for the improper purpose of persuading the recipient to a particular viewpoint.
	In another case, a judge came to much the same conclusions about how misleading and unfair was the result of the public money spent by the council on the ballot. He said that although it contradicted what the Department said should be good practice, there was not actually any law to make councils follow good practice, so they could continue to carry out one-sided shotgun ballots.
	New clause 1 is intended simply to establish a fair, open, democratic ballot in which people who oppose transfer get an equal say. We should have no more one-sided ballots and no more lack of money to support tenants against councils and housing associations that spend 500,000 or 1 million, using DVDs, videos, roadshows, sandwiches and all the rest, trying to persuade people how wonderful it would be to switch. There should be some equality. Public money should not be spent in such a one-sided way, as the district auditor and the judge to whom I referred agreed.
	We have heard about snap ballots suddenly being brought forward to pre-empt planned publicity by people who were going to campaign against an opt-out. We do not have ballots on arm's length management organisations, and why not? Because once there is an ALMO, there is no going back to direct management and direct council responsibility. We have heard about tenants being barred from meetings at which the only people allowed to speak were those in favour of opt-outs. Tenants' posters campaigning against opt-out, for example in blocks of flats, have been ripped down by council employees, while posters in favour of opt-out have been left up on the same notice board. There is a huge catalogue of such things. If we end all that, will it prevent stock transfer? If free democracy, fair play and free speech prevent stock transfer, that is the democratic decision of the tenants, and we should respect it.
	As I said on Second Reading and in other debates, I am not wedded to the idea that everything must be provided by councils. If people want to buy their house, I have no objection so long as the money goes to providing replacements, which it has not over the past 20 years. That has caused a large part of the problem that we now face. If tenants vote to change their landlord, I have no objection. I have the sneaking feeling that, as Members have said, at least if people vote to switch from one political party to another as their landlord, they can vote to switch back later. That is called democracy. Once they are with a registered social landlord such as a housing association, it is a one-way route. The only way to go from there is into bigger and more remote housing associations, through amalgamations and mergers. That is not democracy.

Lembit �pik: Does my hon. Friend therefore agree that it was ironic that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) promoted the Government's legislative direction as improving competition? In fact, it will remove the democratic competition that my hon. Friend has just described. We will end up with a monopoly unless we accept new clauses 1 and 8. The only way we can maintain competition is by providing the opportunity for democratic contests, to ensure that the best interests of the voters, who also happen to be the tenants, are at the heart of the matter.

Paul Holmes: Absolutely. We keep being told that we should empower people to take control of their own lives, yet we are telling half the social housing tenants in this country, You have to take a decision about one of the central things in your lifethe house you live inand if you vote the wrong way, we're going to punish you, penalise you, take your money away, stop your houses being repaired, punish the council that does it and so forth.
	If we believe in democracy, we must accept new clause 1, and vote for it if we must have a vote. It is about having a fair, level playing field and open and honest ballots, rather than the rigged disgrace that we have now.

Mike Hancock: My hon. Friend is being extremely generous in giving way. Has he ever seen the Government's indication of what they consider best practice should be, and is it clearly identified? If local authorities have failed to deliver best practice, why have the Government allowed sham ballots to persist and take effect? I am sure my hon. Friend will accept, as I do, that the Government find it difficult to explain the housing subsidy rip-off, but they should at least be able to explain what they consider best practice in ballots.

Paul Holmes: In fact, the Government have quite a clear view on that. The Department's own guidance, which was considered in a court case only last year, states that material produced by an authority in a transfer ballot
	should state both the possible benefits,
	which it does to a great extent, but that it should also state, which it never does, the
	disadvantages of the options as determined by the investment appraisal... The informal material should never be written in such a way that tenants feel the authority is actively promoting a yes vote by presenting only the pro-transfer arguments.
	In fact, as many people have already attested, and as court cases and district auditors have attested, that is simply ignored, and there is no legal requirement to follow the Government's advice.
	I cannot explain why the Government allow that travesty to continue and insist on ignoring the 2.5 million council tenants who have voted, sometimes repeatedly, wasting 500,000 every time an authority is forced to have yet another ballot on a transfer that will be rejected. Why do the Government keep rejecting what those 2.5 million council tenants have voted for, by saying that they will penalise them? Why do a Labour Government, of all people, keep rejecting and ignoring what their own conference has voted for year after year?
	If we believe in democracy, we must accept new clause 1. If we really want to tackle homelessness and improve the housing conditions of people who tend to be the poorest in society, we must accept new clause 8.

Stewart Jackson: It is a pleasure to follow the hon. Member for Chesterfield (Paul Holmes), who makes his predecessor in the House sound like a raving right-winger. He truly represents the North Korean wing of the Liberal Democrats.

Paul Holmes: Will the hon. Gentleman explain exactly which part of my comments he found distasteful or extreme? Was it the bits about democracy, about recognising council tenants' wishes or about providing a fair financial field? Which was it?

Stewart Jackson: I would not want to give the House the impression that I found anything distasteful or extreme. I just felt that the hon. Gentleman's views were slightly one-sided. Perhaps the Minister will want to comment on that.
	It is worth repeating the situation in which we find ourselves with respect to the amendments that have been tabled, which Members, including the hon. Member for North Southwark and Bermondsey (Simon Hughes), have mentioned. It is not satisfactory that 137 amendments have been tabled since the Bill came out of the Public Bill Committee, and that 379 amendments have been tabled in all. One could make the case that the Government have shown arrogant disdain for the House in how the Bill has proceeded. Not just Her Majesty's loyal Opposition but all Members have the responsibility and duty to scrutinise legislation properly. However, we have not been given that opportunity on this occasion.
	Memories of my days on the housing committee of the London borough of Ealing came flooding back to me during the debate. I have not had much to do with housing since then and I was not able to speak on Second Reading and was not called to serve on the Public Bill Committee, so I am not qualified to say whether the Minister is a good bloke, as he was described. The hon. Gentleman has a winning way and an engaging smile. I shall not go further than that, but all those things stand in comparison with his right hon. Friend the Minister for Housing.
	The debate is only part of our wider examination of the Bill so I do not want to take too much time. I shall focus on the kernel of the debatenew clauses 1, 8 and 9. My right hon. Friend the Member for North-West Hampshire (Sir George Young) presented new clause 9 in a typically intelligent and erudite way, with all his great experience in the housing field. I challenge the Minister to be mindful of the consensus in the House about the provisions in new clause 9 on repossession in respect of rent arrears. The new clause has gained support on both sides of the House so it is incumbent on the Minister to make a strong case as to why it should not be included when the Bill goes to the other place, especially given the support from the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) and the hon. Member for Luton, South (Margaret Moran). As a general principle, the poorest members of society, who happen to live in social housing, should not be discriminated against because of the inefficiency of local authorities in paying housing benefit, so I hope that the Minister will look on the new clause sympathetically. I pay tribute to my right hon. Friend the Member for North-West Hampshire for his work on the Committee, and to my hon. Friends the Members for North-East Bedfordshire (Alistair Burt) and for Poole (Mr. Syms).
	I was looking at the website of the hon. Member for Great Grimsby (Mr. Mitchell) and I listened carefully to his comments.

Austin Mitchell: Always an educational exercise.

Stewart Jackson: Indeed. What is not to like about the hon. Gentleman when he responds to the latest big policy initiative from his right hon. Friend the Minister for Housing in the following way? He said that her arguments
	would have been better left unsaid rather than being dredged up from the graveyard of dead ideas in the basement of the Department for Communities and Local Government.

Alistair Burt: And that was mild.

Stewart Jackson: I think we have already established that unity is not necessarily in evidence among members of the people's party, particularly in respect of the right hon. Member for Greenwich and Woolwich. His was a lonely voice as he ploughed the Blairite furrow.
	The Opposition are minded to support new clause 1, because we feel that a strong case has been made, for which I shall give some historical context. My party has been responsible for progressive social housing policies over the past 100 years. As Members know, in the 1950s the Macmillan Government delivered record amounts of house building. I can understand why the hon. Member for Great Grimsby is upset and somewhat disillusioned with his Government when we look at the figuresthe killer facts. House building starts fell between 2006 and 2007. I have a lot of respect for the hon. Member for Portsmouth, South (Mr. Hancock). As a Portsmouth city councillor of long standing and an erstwhile Hampshire county councillor he knows his onions, but I have to tell him that the average social housing build was 47,000 a year under the Conservatives and only 17,300 under the unlamented former Member for Sedgefield.

Paul Truswell: It is no use the hon. Gentleman quoting statistics. Labour Members, like most Members of the House, know that by 1997 the Tory Government had well and truly turned off the tap for council house new build. You had cut investment in housing by a half or two thirds in real terms, and the straw that broke the camel's back was the fact that you forced local authorities to spend 75 per cent. of capital receipts from house sales on reducing debt rather than reinvestment in council houses. Is that not the sort of record

Mr. Deputy Speaker: Order. Just for the record I did not do any of those things.

Paul Truswell: I apologise, Mr. Deputy Speaker.

Stewart Jackson: I do not doubt your universal powers, Mr. Deputy Speaker, but I probably agree with you on that point.
	I was just getting into my stride on the historical perspective. The reason the housing revenue account had to be reviewed during the period of Conservative government was gross misuse of capital financing by irresponsible Labour councils. They all but bankrupted a large number of local authorities in London and outside. That is why the housing revenue account had to be looked at, although I realise it must be painful

Margaret Moran: rose

Stewart Jackson: I shall make some progress and give way to the hon. Lady shortly, even though she has only just joined us for a cameo role and has not been in the Chamber throughout the proceedings. I shall make a little more progress with my historical tour de force if the House will permit me.
	As the hon. Member for Hayes and Harlington (John McDonnell) said, 85,000 people are in temporary accommodation. I think he was cribbing from the speech my hon. Friend the Member for Welwyn Hatfield (Grant Shapps) made on Second Reading, because my hon. Friend made the same point and in fact collated the data on children in homeless households, among other things. In 2006, there were 526,000 overcrowded households and 667,000 empty properties in England alone. That is the historical perspective. I respect the sincerity of Labour Members and the fact that they care about the issues, so although it should come as no surprise to them that their Government have delivered that situation after 11 years in power I can understand their sense of resentment.

Margaret Moran: While the hon. Gentleman is still on the historical facts it would be interesting to know which local authorities he was describing as bankrupt. Many authorities, including mine when I was leader of Lewisham council, were developing homes despite the strictures against them by the Tory Government. Does he believe that a 19 billion backlog in housing repairs and a doubling of homelessness under his Government is a proud record? In the dying days of the Tory Administration his Government removed the homelessness safety netintroduced after Cathy Come Homefor the most vulnerable people? Is he proud of that?

Stewart Jackson: I am proud that with the right to buy we gave ordinary working people a stake in their future. We gave them capital and the capacity to move up and improve their lives and those of their families and the rest of the community. We do not need lectures from the Labour party, which took the attitude, This is your council house. This is what you've been given and if we fancy repairing it or repainting the front door we'll do it when we get round to it. That totalitarian, Stalinist, top-down approach existed throughout the 1960s and 1970s and, incidentally, kept us in power for 18 years, because the Labour party was so backward-looking.

Alistair Burt: May I make a bid to help matters along? Does my hon. Friend agree that no matter what the history may be there is an outbreak of genuine angst and concern on the Labour Benches about housing after 11 years of Labour government? Opposition Members are trying to put that right through the new clauses they propose. The history does not matter; what matters is today and the fact that the problems Labour Members are raising are not being addressed by their Government. My hon. Friend is speaking accurately to that.

Stewart Jackson: I thank my hon. Friend.
	We are prepared to support new clause 1, as we accept that there is consensus across the House. In developing a historical perspective on housing, I am merely making that case. Conservatives built council houses; Conservatives believe in council houses. Some of the most forward-looking Conservative authorities continue to support social housing. We take a practical and pragmatic view of social housing. We accept that dogmatism does not have a place in housing provision. People are intelligent, and they know what sort of houses they want to live in, and what sort of estates they want to live on, so there is no point in our being dogmatic. It is worth repeating the success of right to buy.
	We believe, too, in local autonomy, the empowerment of tenants and transparency, which is why we are minded to support new clause 1. We want a level playing field, and we want tenants to have all the necessary information. Hon. Members can make the point anecdotally, as the hon. Members for Chesterfield (Paul Holmes) and for Portsmouth, South and others have done, that in some local authorities there has not been a level playing field and the jury has been nobbled. In all honesty, before my local authorityPeterborough city councilundertook a large-scale voluntary transfer, it won an 87 per cent. yes vote, and it was scrupulously fair before the ballot. My predecessor, who was a Labour Member, supported the ballot, and hon. Members will know that she was not always keen on supporting the Government, and certainly not during her second term in the House. However, she saw what was good for her constituentsthe tenantsand the transfer was made from Peterborough city council to Cross Keys Homes.
	We support such proposals, but we are concerned about the intimation from the hon. Member for Great Grimsby, who told us about the ballot in Great Grimsby, that the new clause was a means of blocking further stock transfers, rather than a commitment to a more [ Interruption. ] If he wishes to intervene on me, I am more than happy to be corrected.

Austin Mitchell: That is absolutely untrue. I gave no such intimation, and I had no such thought. It is a gross misinterpretation of what I said.

Stewart Jackson: I am happy fully to support new clause 1, given the hon. Gentleman's clarification. I pay tribute to his colourful and witty tour de force. I hope that there is not a causal link between the fact that his picture was on the literature in favour of the ballot and the fact that he subsequently lost the ballot. I am sure that that is not the case.
	Over the years, the hon. Gentleman has made a big contribution to housing policy, and not just on his blog. Equality, fairness and transparency are important and, on the face of it, new clause 1 is about giving all the information pertinent to a ballot to all the people involved, including the tenants whose lives will be affected by any decision. I do not think that anyone in the House would necessarily disagree with that, and the Minister will find it difficult to support the arguments made by the right hon. Member for Greenwich and Woolwich.
	My hon. Friend the Member for Poole spoke eloquently about the issue raised by new clause 8, as he did in Committee. He spoke from a local constituency viewpoint, and said that 20 per cent. of tenants in Poole unitary authority had to subsidise housing elsewhere, irrespective of demography, their relative poverty and so on. He made a well-balanced speech, as he did not make a knee-jerk attack on the housing revenue account subsidy system. Instead, he said that the general principle should be that national taxation should fund housing, and not the transfer of funds across the country without anyone apparently knowing on what basis the decision is made. In that case, a decision was made by many people. Having said that, the Opposition are not disposed to support new clause 8, which deals with a separate issue from new clause 1.

Paul Holmes: If new clause 1 was accepted and we had an open, honest, democratic ballot, it would still say, You can vote to stay with the council, but your house will fall down, you will be denied money, and your rents will be robbed by the Government. What is the point?

Stewart Jackson: Chesterfield is obviously hit by a plague of locusts on a regular basis, because the hon. Gentleman takes an apocalyptic view of the situation. One thing does not necessarily follow the other.
	I do not agree with the hon. Gentleman, because it is incumbent on the official Opposition at least to give the Government a chance to make their case by virtue of the review. The House will know that the right hon. Member for Pontefract and Castleford (Yvette Cooper), the previous Minister for Housing, promised a review of all council housing subsidies at the end of last year. On that basis, it would be wrong to support the provision before we have more information about the success and efficacy of the pilot scheme and the review of the HRA subsidy. I accept what hon. Members have said about the delay and the time that it has taken to establish a review, but one is now under way, so it would be precipitate of us to go ahead and join some Labour Members in the Lobby in support of new clause 8, notwithstanding the eloquent comments of my hon. Friend the Member for Poole, and the speeches of the right hon. Member for Oldham, West and Royton (Mr. Meacher) and the hon. Members for North Southwark and Bermondsey, and for Hayes and Harlington, all of whom made strong, persuasive points. At this stage, it is sensible, rational and responsible to wait for the outcome of the review before making a decision. We should not make a knee-jerk or precipitate response on the housing revenue account.

Lembit �pik: The hon. Gentleman may have forgotten that, two weeks agothis was mentioned in the debatethe pilot indicated that the fund was underfunded by 43 per cent. He is waiting for information that has already been published so, in the light of that fact, he can agree with new clause 8.

Stewart Jackson: It is appropriate to stick to our position. We are prepared to give the Government the benefit of the doubt. There was an element of consensus, both in Committee and today, but unless the hon. Gentleman can answer every single question that will arise from the review, we will reserve judgment. We do not think it appropriate at present to support new clause 8. We do not wish to fetter our discretion in future, and we may well take a different position when we know the results of that review.

Lembit �pik: I do not want to enter into a dialogue, but I cannot let the Opposition off the hook. [Hon. Members: Go on.] Oh no, I will not.

Simon Hughes: They are not the Oppositionthey are just the Tories.

Lembit �pik: I am sorry, I should have said that I will not let the Conservative party off the hook.
	The hon. Member for Peterborough (Mr. Jackson) has set out the condition that would have to be fulfilled if the Conservatives were to support new clause 8 namely the evidence that the provision was not working very well. We have just pointed out that the evidence has been published, and he is now making a different argument. He does not have the luxury of waiting, as we are making the decision for the country today. To reserve judgment is to agree with the Government and it will be too late for him to say afterwards that he was going to change his mind. I therefore encourage him to support new clause 8, because in 15 minutes' time, it will be too late.

Stewart Jackson: That is a bit rich, coming from a party which, like the governing party, promised a referendum on the European Union treaty.
	We on the Conservative Benches are prepared to take new clause 1 at face value. We will support it, if it is pressed to a Division. We do not consider at this stage that we can support new clause 8. In so doing, we take nothing away from the sincerity and decency of the views expressed by hon. Members, but we do not consider it appropriate at this time to go forward with that.
	Finally, on other new clauses and amendments, the Government should think about whether the Liberal Democrats amendments to which the hon. Member for Montgomeryshire spoke are acceptable. On new clause 9, I make a final plea. There is a strong belief that this is a sensible and measured approach, articulated by my right hon. Friend the Member for North-West Hampshire. I hope the Minister will give it the time and attention that it obviously deserves.

Iain Wright: This is the first time that I have sparred over the Dispatch Box with the hon. Member for Peterborough (Mr. Jackson). I welcome him to the Front Bench and wish him well in his new role.
	There has been a huge debate on the first group of amendments. Let me start at the beginning, which seems a long time ago, with new clause 9, tabled by the right hon. Member for North-West Hampshire (Sir George Young). He will recall that we had an interesting debate on a similar topic in Committee in January. I am pleased that it has been raised again, so that I have the opportunity to update the House on our progress since then and my plans for moving matters forward.
	In responding to the amendments and the other points that have been raised, I am conscious of the need to address incredibly important points in other parts of the Bill, so I will seek to achieve a balance between responding to the comments of hon. Members and making progress with the Bill.
	New clause 9 does two things. First, it prevents registered social landlords from everI stress the word everusing ground 8 in possession proceedings. Secondly, it provides that a court should not grant possession to any landlord under ground 8 if any of the arrears arose as a result of delays or failures in housing benefit payments, unless it considers that it is reasonable to do so.
	The Government have already made it clear that for registered social landlords eviction should be used only as a last resort in rent arrears cases, particularlyI stressed this in Committeewhere the arrears have occurred as a result of delays in housing benefit payments. Good practice guidance published in June 2005 on improving the effectiveness of rent arrears management included advice and best practice on early intervention policies and proactive approaches. The Housing Corporation also issued housing management guidance in early 2007 which stated:
	Possession proceedings for rent arrears should not be started against a tenant that can demonstrate they have a reasonable expectation of eligibility for housing benefit; provided the local authority with all the evidence required to process a housing benefit claim; and paid required personal contributions towards the charge.
	A pre-action protocol for rent arrears has also been established as part of the civil procedures rules, with the aim of ensuring that eviction is the last resort for all landlords in rent arrears cases. The protocol sets out various measures that social landlords must take before starting possession proceedings on the basis of rent arrears. However, both in Committee and on the Floor of the House today, the right hon. Gentleman made a strong case, and I recognise that there remain concerns about the actions of a small minority of RSLs and other private sector landlords. I am keen to ensure that those are resolved.
	I have therefore asked my officials to convene a working group meeting with the key stakeholders, including Shelter, Citizens Advice, the National Housing Federation, the Council of Mortgage Lenders and the Housing Corporation to examine those concerns and report back to me by the summer, recommending options for a way forward. In light of the regulatory framework that we are putting in place, I am particularly interested in the role that Oftenant could play in addressing the problem for the registered social landlord sector. The reformed system of regulation, which will give a stronger voice to tenants to bring issues of concern to the regulator and a more targeted system of regulatory action, seems a good approach to dealing with the matter.
	In addition, as I stated in Committee, the private rented sector review being led by Julie Rugg of the university of York will look at the issue in relation to the private sector. The review is due to be published in October this year. Given my commitment, I hope that the right hon. Gentleman will withdraw the motion.
	I turn to the central element of today's debatenew clause 8, to which my hon. Friend the Member for Great Grimsby (Mr. Mitchell) spoke so excellently. I shall deal with the narrow point, then go on to the wider point, the financing of council housing, which is the subject of the debate. With the greatest respect to my hon. Friend and to my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) and my hon. Friend the Member for Hayes and Harlington (John McDonnell), who reiterated many of the points that they made on Second Reading, new clause 8 would have no impact on the way that the Secretary of State carries out her existing statutory duties. In that respect it is unnecessary.
	New clause 8 would require the Secretary of State to take certain matters into account when determining what subsidy to give to local authorities to support their housing revenue accounts. In particular, it would require her to consider the resources needed to meet the decent homes standard and the need for affordable housing. But the Secretary of State is already required by public law to act reasonably in making the annual subsidy determination and to take into account all relevant considerations. Those considerations would include both housing needs and the resources available.

Paul Holmes: Will the Minister therefore explain why your own studythe Department's own study published two weeks ago, with six pilot councils drawn from cities and rural areas, a good cross-section, shows that you are underfunding those six authorities by 40 per cent.? How can the Government be taking those considerations into account?

Mr. Deputy Speaker: Order. Not me again. The hon. Gentleman should get his nomenclature right.

Iain Wright: It sounds as though you have been very busy, Mr. Deputy Speaker.
	I want to dispel the myth that the Government have starved council housing of funds. In the decade since we came to power, there has been a 30 per cent. increase in real terms in council house spending, from about 800 a home to about 1,100 a home. There is more money available to councils to improve and maintain their stock. I reiterate that we have not been starving councils and local authorities of funding for housing.

Grant Shapps: Does the Minister share my dismay that the Government have built less council housing every year in their 11 years than we did in any year under Margaret Thatcher or John Major?

Iain Wright: My right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) made the excellent point that there was about a 20 billion backlog and appalling standards. People were living in slums in local authority sectors. We have provided sustained investment in social housing, combined with private funding, to provide about 500,000 new kitchens, 500,000 new windows so that people are able to save on fuel bills and achieve greater energy efficiency, and 918,000 new central heating systems. One million childrenthe equivalent of a city the size of Birminghamhave been lifted out of inadequate social housing. That is a record that we should be proud of, and the hon. Gentleman should appreciate the size of the backlog that we have had to address over the past 10 years.

Graham Stuart: I am grateful to the Minister for giving way, and I hear his points about investment in the housing stock. However, does he not agree with us about the performance on delivering new housing during nearly 11 years of Labour Governments? There have been fewer houses every single year. That is not a proud record, and not one that many of his colleagues behind him would have expected after 11 years of Labour Governments.

Iain Wright: I expected better of the hon. Gentleman, whom I respect a lot. People in social housing had to contend with inadequate, almost slum housing under his party's Government. We have a record to be proud of. Circumstances change, and over the period of a decade, the emphasis should be about improving supply. I utterly agree with that, and that is what this Billparticularly its creation of the Homes and Communities Agency and self-financing in respect of local authoritieswill be able to achieve. I hope that the hon. Gentleman will support us on that.

Austin Mitchell: We need to shift the argument back to the Minister's point that the Government were not underfunding. They are underfunding. In 2003, the Department then responsible, the Office of the Deputy Prime Minister, commissioned the Building Research Establishment to look at the allowances for management, maintenance and major repairs. That research, commissioned by the Government, showed that the Government were underfunding the allowances to local authorities by a third. In other words, the allowances should have been 5.5 billion, but they were 3 billion. The gap has widened since; on my calculation, there should be 6.6 billion today, but there is only 3.4 billion. The Government are underfunding in that crucial respect.

Iain Wright: Let me address that point, which relates to the central point of the debate, about what system we should use to finance council housing. Let me put the debate in the context of the Bill. Clause 297 will enable us to exclude specified properties within a council from the housing revenue account subsidy system. We intend to use that power to allow councils to apply to exclude new homes that they build from being added to the housing revenue account. That will create an incentive among councils to build new homes by giving them more income from such properties. That issue seems to have cross-party consensus.
	As a former borough councillor, who was proud to serve on my local authority, I think that councils have a range of roles with regard to housing. One is key: place shaping. Councils know what is needed in their areas and provide strategic housing assessments to determine the type of houses required and where they should be. They also have a direct delivery role. I am excited that the Bill, in conjunction with other things such as the housing revenue account review that, as Minister for Housing, my right hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) announced in December, will move us into an exciting new era, in which we look fundamentally at how we finance council housing and, crucially, make sure that councils have that direct delivery role. I am proud to stand at this Dispatch Box and say that this is the return of the council house. I hope that the hon. Member for Chesterfield (Paul Holmes) will agree.

Paul Holmes: I only wish I could. However, I do not believe that what the Minister has described will happen; it has not in the past 11 years. How can councils start to build houses and keep all the rent when 75 per cent. of the right-to-buy money goes to the Government, whereas a housing association would keep it all, and when millions of pounds in rent 4 million this year in Chesterfieldgoes to the Government, whereas a housing association would keep it all?
	Right to buy takes away from councils that guaranteed revenue flow from rents, whereas housing associations are not subject to the right to buy in respect of most of their stock, apart from that subject to immediate transfer. Councils have no security and income in that respect and cannot apply for social housing grant. Why can the Minister not accept new clause 8 and put housing associations and councils on a level financial playing field?

Iain Wright: I have just explained the initiatives that we are putting in place. We cannot implement or change something as complex as the housing revenue account subsidy system without undertaking a review and thinking through the consequences. If the hon. Gentleman seriously believes in ill thought through, knee-jerk legislation, I will leave him to it.
	There is a serious point about the principles of financing council housing. How is it locally accountable? How do we take into account the redistribution element? How do we ensure a direct correlation between rents paid and services provided? Given the complexities of the system and the redistributive element, we need to address those questions. That is precisely what the housing revenue account review, introduced by my right hon. Friend the Member for Pontefract and Castleford, addressed.

Paul Holmes: rose

Iain Wright: Before I give way, let me quote from my right hon. Friend's written ministerial statement. These are the principles on which we need to undertake a review on council house financing:
	This system should be fair to both tenants and taxpayers. It should be transparent, giving a clear and accurate picture of the balance of support from local and central Government. It should enable delivery of agreed standards of service and accommodation. It should recognise that social rents should help tenants gain and retain work, whilst acknowledging the need for landlords to improve the quality and efficiency of services. And it should be affordable and not expose Government to unacceptable fiscal risks.[ Official Report, 12 December 2007; Vol. 469, c. 34W.]
	Those are the principles on which we need to move forward; they are based on the good work of the Audit Commission in its 2005 report on financing council housing.

Paul Holmes: I thank the Minister for giving way; he is being very generous. My point is simply that councils should be treated as housing associations are. If the 10,000 council houses in Chesterfield were transferred to a housing association, they would be treated utterly different. Let the council be treated the same as the housing association. Is the Bill a revolution in council housing? The impact statement for the Bill says that 2,500 houses are involvedthat is, an average of five per constituency. That is not a revolution in council housing.

Iain Wright: I should also like to dispel the myth that registered social landlords are evil incarnate; I do not think that they are. I am keen to see more bang for the public buck. If housing associations can provide extra resources and extra homes and improved services, with the ability to gear up private financing, that should not be dismissed.
	When we took evidence during the Public Bill Committee sittings in December, Alan Walter of Defend Council Housing said in response to a direct question from me that he did not think that private borrowing was bad and that it should be encouraged as much as possible. That was entirely right. Before I go on to the important point about levelling the playing field, I give way to my hon. Friend the Member for Hayes and Harlington.

John McDonnell: A number of the issues that the Minister has just raised are straw men to be knocked down; no one has raised those sorts of arguments. Will the Minister give us a time scale by which the review will be completed, the recommendation will be brought to the House and legislation will be prepared? Do we now have a commitment that the legislation will happen in this Session?

Iain Wright: The review will be completed by spring 2009; I anticipate that recommendations arising from it will go out to consultation and that any legislation would take place after that.

John McDonnell: rose

Iain Wright: I am keen to move on. I give notice that this is the last time I will give way on this point.

John McDonnell: Perhaps the Minister needs to take this message back elsewhere. What he has said means that our constituents have a two-year wait before the product of those deliberations and new legislation. One would expect an impact schedule after that of another year to two years. That means that homelessness will grow, that overcrowding will continue and that the 700 children now in bed and breakfasts will certainly multiply twofold. Does the Minister not see that the House is trying to relay a sense of urgency to him on this matter? The new clause reflects that sense of urgency.

Iain Wright: I also share that sense of urgency; that is why I am keen to see the Homes and Communities Agency on the statute book as quickly as possible. It will be charged with helping to create the 3 million homes that we so sorely need by 2020. It will have about 8.5 billion of public money to achieve that ambition.
	As I mentioned in Committee, Sir Bob Kerslake, who will be the agency's chief executive, mentioned in a letter that, in respect of the transitionary team arrangements, he sees local authorities as the agency's best delivery partner. I am paraphrasing, but I am not being too inaccurate. With housing at the top of the political agenda and unprecedented sums of public money, I see the Homes and Communities Agency able to step up to the plate and make sure that the country has the homes that it needs in the next few years. I hope that the whole House will be encouraged by that.

Austin Mitchell: rose

Iain Wright: Given my hon. Friend's importance with regard to the new clause, I will certainly give way.

Austin Mitchell: I am most grateful to my hon. Friend. Another view is that 2.8 million people in council housing are being left to fester, without repairs and maintenance being done properly or on a sufficient scale because of the inadequacy of the management, maintenance and major repairs allowances, and that that will go on until after an election, which will almost certainly be in 2010. The amendment does not ask him to recast the whole business of the housing revenue accountsthat is for the review, which will deal with questions of historical debt and redistribution between authoritiesbut merely asks him to provide proper resources to manage, maintain and repair according to research into those areas, such as by building research organisations, and to provide a development allowance.

Iain Wright: I understand what my hon. Friend is saying and respect his views. I would point out to him that in terms of management and maintenance allowances, there were above-inflation increases in 2004-05, 2005-06 and, I think, in 2006-07 of about 6 per cent., 6 per cent. and 4 per cent. respectively. The fundamental point is that the Bill helps to remove, as much as possible, the disincentives for councils to go ahead and build. I think that councils with good performances, in conjunction with other partners will step up to the plate and ensure that we really are building new council houses. There is nothing wrong with that. This country sorely needs it, and I fully welcome it.
	However, we must also consider that in the wider context of the difficulties and complexities about how on earth we finance council housing. The housing revenue account is deeply unsatisfying for all concerned. It is so confusing that even my right hon. Friend the Member for Pontefract and Castleford does not understand it, which takes some doing. She has said on the Floor of the House that every time she had to deal with it she had to have a wet towel round her head. That is not good in terms of openness and transparency. We must ensure that it is fit for purpose in the modern agethat there is a direct correlation between rents, services provided and moving on with new builds and improving quality. I would suggest that we are moving towards the level playing field that my hon. Friend the Member for Great Grimsby and other hon. Friends have mentioned, but we need to think about it in the wider context and get rid of some of the complexities that the housing revenue account subsidy system perpetuates.

Katy Clark: Does my hon. Friend appreciate that the amendments are in line with Labour party policy as passed at all the recent national Labour party conferences, and does he not therefore think that it is only appropriate to support them?

Iain Wright: I hope that I am making it clear to my hon. Friend that I am not saying that councils do not have a role. As I said, it is important that they have a strategic role in assessing the housing needs in their area and coming to a view in what particular types of housing are required, whether it is housing for older people or accommodation for young families. That is the sort of thing that we need to be doing through the planning system. However, I genuinely believe that there is also a role for councils to have a direct delivery route. I hope that she will be encouraged by what we are doing in the Bill to move forward further and faster. The review of the housing revenue account subsidy system will make recommendations on how we can fund that. The key point is how we increase transparency and fund this to ensure that everybody gets a fair deal. That is not as easy as has been suggested in the House today.

Lynne Jones: Given my hon. Friend's assurances, would he care to hazard a guess about how many additional council homes we will be building at the time of the next election?

Iain Wright: That is a difficult one to answer, but I will be open and up front with the House. In the regulatory impact assessment, we say that some 2,500 new council houses will be built on the back of the provisions in the Billon an annual basis, I hasten to add. That contrasts with the 250 to 300 houses per annum that we are building at the moment. I think that we are moving on this and that there is not much difference on it between Members in all parts of the House. Councils do play a role, but I suggest, with the greatest respect to the House, that housing associations and other providers also have a key role in helping to lever in private borrowing.

Lembit �pik: rose

Iain Wright: I will give way for one last time, and then I want to move on to new clause 1.

Lembit �pik: The Minister is right to spend time on this, because it is one of the key elements in the Bill. Can he confirm that he believeshe must, I supposethat if new clauses 1 and 8 are not passed, we will build more houses than we would if they were passed? I remind him that he has not yet addressed amendments Nos. 14 and 15; if he does not do that, I will ask for a separate vote.

Iain Wright: The hon. Gentleman will therefore forgive me for moving on quickly. I would say that there are two separate issues, because the two new clauses are similar but talk about different things.
	On new clause 1, I thank my hon. Friend the Member for Great Grimsby, who has acted as a true champion of ensuring that tenants get good and adequate information. I am very interested in the points that he has raised and I have been listening intently. He mentioned two key points with regard to the introduction of a code of practice, the first of which concerns the objectivity of the information that is provided to tenants. Before I expand on that, I must put it on record that he makes some very good points. I know that from personal and direct experience, because in a former life I was an auditorI apologise to the House for thatand one of the things that we considered and undertook reviews on was the quality of information provided during large-scale voluntary transfers. At times, the information provided has been slightly one-sided; although in general, it is a good procedure, and most local authorities provide a fair, open, transparent and balanced view of the stock transfer options. However, I accept the point excellently made by my hon. Friend that there is a need for more objectivity, so with his permission I would like to take this issue away and look at it again. I would like Oftenant to have a role in this. I would also like the Homes and Communities Agency to play a role in relation to the information provided and perhaps in having some impact on the funding of such information. I want to look at this closely, and with my hon. Friend's co-operation and assistance, I hope to do so with a view perhaps to tabling amendments in another place or when the Bill returns here. He has a fair point, and I hope that he accepts that I am very keen to help him.

Austin Mitchell: I am most grateful to my hon. Friend; it is good to find that he is listening. He did a good job of defending the indefensible on finance for council housing. However, there are certain points that I would like to reiterate. Now that I have the serried ranks of the Conservative party, the Liberal party and my hon. Friends, including my hon. Friend the Member for Hayes and Harlington (John McDonnell), behind my amendment, I would like to make it clear what we are asking for: a definite date for the ballot so that there is no jiggery-pokery in changing it all around; a fair and balanced debate; extension of the 28 days allowed in the Bill for tenants to raise concerns and ballots for ALMOs as well for large-scale voluntary transfers.

Iain Wright: Certainly on my hon. Friend's first two points, I am keen to work with him and think that he has a fair argument. It is right, for example, that tenants should be given sufficient notice of the time when the ballot will be held in order to allow their proposals to be subject to the full consultation that they deserve. I think that I have dealt adequately with the objectivity exercise with regard to information. In terms of requiring the local authority to give adequate notice, again, I am keen to work with him, and others, to deal with that.
	The third point is slightly more complex. On tenant ballots, the issue is a change of tenure as opposed to a change in management. Good practice always indicates that tenants should be fully engaged with regard to the change of management. The system works well in the main, but I pledge to my hon. Friend and others that when we look at the renewal of guidance, we might need to look at the issue again. I do not want to impose unnecessary restrictions and burdens on local authorities and others in order to move things forward, but I would like to meet my hon. Friend so that we can find that way forward. I hope that I have given him my clear pledge on the matter, and reassured him so that he can end the unholy alliance he is leading with Her Majesty's Loyal Opposition.

Frank Dobson: I am sure that everyone welcomes the idea of free and fair electionsnot just in Zimbabwe, but in the ballots we are talking about. I welcome what my hon. Friend the Minister has suggested, but if at the end of the process tenants vote to stay with the council, we are saying, So what? You won't get any money to do up your housing. That has been the problem all along. In Camden, the council did its level best to get tenants to vote for the ALMO, but 77 per cent. of tenants and 77 per cent. of the leaseholders voted against. People are left in a position where a Labour Government are refusing to find any money to do up housing. The council is now selling the most attractive individual houses on the streets to raise money in order to do up a small part of the rest of the estate.

Iain Wright: I disagree slightly with my right hon. Friend about that because all local authorities now have a clear road map on achieving decent home standards, regardless of management or ownership of the property. I know that Camden is a special case and that my right hon. Friend has worked hard in that instance, but the roles are clear. I reiterate this point: far from being starved of funds, there has been a 30 per cent. increase in the amount of council funding from central Government. Private borrowing can be levered in so that more can be done more quickly. I was on a local authority when we had a large-scale voluntary transfer, and in many respects the problems of housing demand were exacerbated, because my registered social landlord, Housing Hartlepool, has been so successful that people who did not deal with it previously now want to move into a social landlord property. The problem of demand has been exacerbated, and we need to address it by building more homes. I want to reiterate my central message, and the central point of the Bill, which is that we need more homes of all different types.
	I shall move on to the other points made in the debate, particularly those made by the hon. Gentleman foris it North Bermondsey and Southwark?

Simon Hughes: North Southwark and Bermondsey.

Iain Wright: Never mind.
	On new clause 29, I agree with the hon. Gentleman that sinking funds are a sensible idea to help leaseholders spread contributions over the longer term and to help to avoid high, one-off costs for capital works. I have worked with my hon. Friends the Member for Regent's Park and Kensington, North (Ms Buck) and the Member for Islington, South and Finsbury (Emily Thornberry) on this matter, and I am keen to make sure that we can help as much as possible.
	I suggest to the hon. Gentleman, however, that the provision is unnecessary because councils already have the ability in question, where leases allow. We are aware of the practical obstacles that prevent that process from happening in practice, and it is currently difficult for a local authority to contribute to the sinking fund the precise amount that would represent the sums payable by non-leaseholdersthe so-called tenant's proportion. The local authority's contribution on behalf of the tenants would be needed to ensure that the fund was adequately resourced to meet the full cost of any such works and to provide the necessary clarity and transparency with regard to its real value. Earlier sinking funds lapsed largely because leaseholders were reluctant to make contributions when works were not carried outoften because of a lack of resources. It has also been difficult to set contributions that balanced the need for affordability and the need to be realistic in meeting the costs of works.

Jeremy Corbyn: I thank the Minister for giving way, and for the meeting that he held with a number of colleagues concerning this matter. Does the legislation, which he supports, allow local authorities to conduct a case-by-case analysis of the needs of leaseholders when major works are done? Like every other Member of this House, I have many poor constituents, who bought their properties under right to buy in the 1980s and simply cannot afford the requirements for the capital costs of new roofs and so on. We need a degree of flexibility when dealing with this matter.

Iain Wright: My hon. Friend makes an important point and during my time in the Department I have tried to deal with the need for local authorities to be flexible. That is provided for in the Bill, and it went through Committee relatively successfully. Authorities should provide things such as equity loans and equity shares in order to have flexibility with regard to circumstances on the ground and should consider how best to address the concerns that my hon. Friend raises. In the meeting I had with him, he eloquently talked about the concerns of the more vulnerable people in his constituency and others. How do we deal with that issue? I do not want to suggest that the housing revenue account subsidy review will solve all of the world's problems, but in the wider context, it will consider how we balance affordability and realism in order to ensure that we have sinking funds and that the capital costs of service charges are dealt with.

Simon Hughes: I am grateful for the Minister's considered response, but the problem is that some leases do not allow for sinking funds. We need legislation to change to allow them for every lease, even if, originally, the terms of such leases did not allow for such a fund. Before the Bill is looked at in detail at the other end of the building, I hope that I can persuade the Minister that we might find a common formula that would allow every lease to have a sinking fund, which could be used by the local authority and the leaseholder.

Iain Wright: I would certainly be happy to look at the matter on that basis because I am keen to ensure that we do something about it. I am concerned that in the constituencies of my hon. Friends the Member for Islington, North (Jeremy Corbyn) and the Member for Regent's Park and Kensington, North, people are sufferingoften the most vulnerable in society, for whom we need to do morebecause of that problem. The provisions in the Bill help with that process as much as possible, and they help local authorities to provide flexible consideration on the ground, dictated by local circumstances. I take the point about existing leases, and I would be happy to meet the hon. Member for North Southwark and Bermondsey (Simon Hughes) to discuss it.
	On the hon. Gentleman's new clause 31, we all agree that leaseholders should have a fair deal when it comes to service charges, but we want to ensure that they contribute their fair share to those charges. That is why we have put in a place a system of safeguards and measures that make people aware of what they are taking on when they buy a leasehold property and that involve them in decisions about works to their property. Provisions in the Landlord and Tenant Act 1985, which were amended by the Commonhold and Leasehold Reform Act 2002, already cover much of what is proposed by the hon. Member for North Southwark and Bermondsey. As the House will be aware, there are statutory requirements for all landlords, including those in the local authority and the social sector, to consult their leaseholders before carrying out works in their buildings and estates. Those requirements cover much of what is proposed in the new clause, including the requirement for landlords to give reasons for works, to provide details of works to leaseholders, to have regard to tenants' observations, and to obtain nominations for potential contractors. On that basis, I suggest that the new clause is not necessary.
	Amendment No. 145, which would amend section 105 of the Housing Act 1985, would introduce a duty for local authorities to seek the views of secure tenants when the Secretary of State was conducting a public consultation on housing management where a response was made by the authority. The amendment would require landlords to consult tenants on all national Government consultations that affect them when the landlord intends to respond. From the face of the hon. Member for North Southwark and Bermondsey, he appears to agree with me that that is unnecessary and an unmanageable burden, without any real benefits to tenants, especially given that we already have excellent and effective consultation procedures nationally. I therefore hope that the hon. Gentleman will not press that amendment.
	Let me deal with amendments Nos. 14 and 15, which the hon. Member for Montgomeryshire (Lembit pik) tabled. I want to consider Government amendments Nos. 40 to 43 at the same time because I believe that our amendments, especially amendments Nos. 40 and 42, would achieve the same thing. Government amendments Nos. 40 to 43 are designed to do three things. First, they would ensure that, when a landlord or tenant makes a request to the district valuer for a review of his valuation of a property for right-to-buy purposes, the request and the reason supporting it should be in writing.
	Secondly, the amendments would clarify that the determination of value can be reviewed only if the sale has not been completed. I suggest that that is almost exactly the same as amendments Nos. 14 and 15, which reflect a suggestion, as the hon. Gentleman eloquently pointed out, that London Councils made. I am glad that we can all agree on that sensible suggestion.
	Thirdly, our amendments are designed to ensure that, in the review process, which clause 290 introduces, the district valuer knows the date from which specified time limits are calculated. Clause 290 will allow district valuers to withdraw determinations of value and make new ones if they decide that their original valuation was factually flawed, acting either on their initiative or in response to a request from the landlord or the tenant. The aim is to make the right-to-buy valuation procedure more responsive to particular circumstances. At present, wrong valuations based on errors of fact cannot be corrected without court action. On that basis, I hope that the hon. Gentleman will

Lembit �pik: To finish the sentence, not press the amendments. I would love to comply, but I want clarification of some practical matters. The Under-Secretary says that Government amendments Nos. 40 and 42 would achieve the same outcome as amendments Nos. 14 and 15. That means that he believes explicitly that it would not be possible to reopen the question of the valuation from the point of completing a right-to-buy purchase. First, is he saying that that is the case? Secondly, exactly which part of the amendments makes that case?

Iain Wright: The hon. Gentleman makes a good point. I agree that it would be undesirable if a landlord or tenant challenged the agreed price of the property after completion or if a district valuer could decide on his own initiative to review the valuation after completion. Once a property has been sold, that should be that.
	I hope that the hon. Gentleman agrees that flawed valuations are unfair. If they are too high, the tenant needs an unnecessarily high mortgagewe have been discussing credit crunch and restrictions on mortgages this afternoonor may be unable to afford to buy. Valuations that are too low mean that the landlord and the taxpayer receive a lower receipt than is justified.
	In response to the hon. Gentleman, I suggest that clause 290 aims to ensure that such issues can be resolved flexibly. The Government amendments are designed to ensure that the district valuer has the necessary information to enable that to happen as expeditiously as possible. I therefore hope that hon. Members will accept Government amendments Nos. 40 to 43 and that the hon. Gentleman will not press amendments Nos. 14 and 15, on the basis that our amendments achieve what he wants.

Lembit �pik: I offer the Under-Secretary a dealI am not playing games with him. I do not believe that the Government amendments do what he set out. If, on the basis of impartial legal advice after the debate, the amendments do not achieve what he says, will he commit to introducing a statutory instrument to achieve what amendments Nos. 14 and 15 propose? If he is willing to do that, and, acting in good faith on the basis of legal advice, which we do not have the time or resources to seek now, to try to achieve something that we both agree should happenI am not persuaded that the Government amendments achieve itI will not press the amendments to a vote.

Iain Wright: I am keen to reassure the hon. Gentleman. I reserve the right to consider the matter as flexibly as possible, but he has suggested a sensible approach which I am keen to go away and examine. On that basis, I hope that he will not press his amendments.

Lembit �pik: I understand that the Under-Secretary is saying that we will have a statutory instrument Committee, if, on the basis of an impartial conversation with lawyers and probably London Councils, we decide that the Government amendments do not achieve what he said. I am grateful for that assurancethe Under-Secretary has taken a mature approach. On that basis, I will not press the amendments to a Division.

Iain Wright: I am grateful for that. The approach reflects the way in which the hon. Gentleman worked in Committee. He was sensible and reasonable and I pay tribute to him for that.
	I have made the Government's position clear on the important group of amendments that we are considering. On the key central elements of the amendments, I hope that I have reiterated my view and the Government's policy that council housing, especially new build, is essential to help address genuine housing needs.

Alistair Burt: Will the Under-Secretary give way?

Iain Wright: I will, but let me say how disappointed I am to see the hon. Gentleman on the Back Benches rather than being excellent on the Front Bench, as he was in Committee.

Alistair Burt: I am grateful to the Under-Secretary for that kind remark. It is now quarter past eight and we have been discussing the first group of amendments for about four hours. There has been no time wasting. With five more substantial groups of amendments to cover, not enough time has been allocated. Before he sits down, will he tell the House that he will not press the matter to a conclusion with the end of Report and Third Reading but sort out more time with the usual channels? Does he appreciate how welcome that would be to the House? He must be as worried as anyone about the fact that we cannot deal with a substantial range of amendments in the way I know he would wish.

Iain Wright: The hon. Gentleman makes an important point. I hope he acknowledges that I have been keen throughout our deliberations for hon. Members to have the opportunity to raise appropriately all points and concerns. On his specific point about the usual channels, with the greatest respect, that is above my pay grade. I am keen to ensure that the Bill receives the proper scrutiny that it deserves. However, Her Majesty's loyal Opposition cannot have it all ways. On Europe

Mr. Deputy Speaker: Order. I have been fairly tolerant for a little while. Perhaps the Under-Secretary should now return to the new clause.

Iain Wright: Thank you for your guidance, Mr. Deputy Speaker.
	I hope that I have made the Government's position clear and that we have responded to concerns. I hope that my hon. Friend the Member for Great Grimsby, who tabled amendment No. 5 and new clause 1, is reassured that I am keen to address his concerns.
	On that basis, I hope that hon. Members will accept the Government amendments and not press their own.
	 Question put and agreed to.
	 Clause read a Second time, and added to the Bill.

New Clause 12
	  
	Shared ownership leases: protection for certain leases

'(1) After paragraph 3 of Schedule 4A to the Leasehold Reform Act 1967 (c. 88) (exclusion from enfranchisement for certain shared ownership leases granted by housing associations) insert
	3A (1) A lease which does not fall within paragraph 3 is excluded from the operation of this Part of this Act if the lease
	(a) meets the conditions mentioned in sub-paragraph (2);
	(b) meets any other prescribed conditions; and
	(c) does not fall within any prescribed exemptions.
	(2) The conditions referred to in sub-paragraph (1)(a) are that the lease
	(a) was granted for a term of 99 years or more and is not (and cannot become) terminable except in pursuance of a provision for re-entry or forfeiture;
	(b) was granted at a premium, calculated by reference to the value of the house or the cost of providing it, of not less than 25 per cent, or such other percentage as may be prescribed, of the figure by reference to which it was calculated;
	(c) provides for the tenant to acquire additional shares in the house on terms specified in the lease and complying with such requirements as may be prescribed;
	(d) does not restrict the tenant's powers to mortgage or charge his interest in the house;
	(e) if it enables the landlord to require payment for outstanding shares in the house, does so only in such circumstances as may be prescribed;
	(f) provides for the tenant to acquire the landlord's interest on terms specified in the lease and complying with such requirements as may be prescribed; and
	(g) states the landlord's opinion that by virtue of this paragraph the lease is excluded from the operation of this Part of this Act.
	(3) In any proceedings the court may, if it considers that it is just and equitable to do so, treat a lease as meeting the conditions mentioned in sub-paragraph (2) despite the fact that the condition specified in paragraph (g) of that sub-paragraph is not met.
	 Certain leases for the elderly.
	(2) For the italic heading before paragraph 3 of that Schedule to that Act substitute
	 Certain housing association and other leases'. [Alison Seabeck.]
	 Brought up, read the First and Second time, and added to the Bill.

New Clause 13
	  
	Service charges: provision of information and designated accounts

'Schedule (Service charges: provision of information and designated accounts) (which relates to the provision of information about service charges and to service charge funds) has effect.'. [Alison Seabeck.]
	 Brought up, read the First and Second time, and added to the Bill.

Simon Hughes: On a point of order, Mr. Deputy Speaker. Am I right that, if we want to press new clause 1 or new clause 8 to a Division, it happens later, but that you will facilitate a vote before the end of Report at nine o'clock?

Mr. Deputy Speaker: The hon. Gentleman is correct. When we get to nine o'clock, the Chair will have to decide exactly what Questions to put, and will seek to look to hon. Members who want to press or withdraw amendments at that time.

New Clause 14
	  
	Duty to give financial assistance in respect of certain disposals

'(1) The HCA must exercise its powers under section 22 to give financial assistance by way of grant to a relevant provider of social housing in respect of any discount given by the provider
	(a) to a person exercising the right to acquire conferred by section (Right to acquire), or
	(b) on a disposal of a dwelling in England by the provider to a qualifying tenant otherwise than in pursuance of the right conferred by that section.
	(2) In subsection (1)(b) qualifying tenant means a tenant who was entitled to exercise the right to acquire conferred by section (Right to acquire) or by section 16 of the Housing Act 1996 (c. 52) in relation to a dwelling of the relevant provider of social housing other than the dwelling being disposed of by the provider.
	(3) The amount of the grant given by virtue of subsection (1)(a) to a relevant provider of social housing for any year is to be the aggregate value of the discounts given by that provider in that year.
	(4) The amount of the grant given by virtue of subsection (1)(b) to a relevant provider of social housing must not exceed the amount of the discount to which the tenant would have been entitled in respect of the other dwelling.
	(5) The HCA must specify
	(a) the procedure to be followed in relation to applications for a grant by virtue of this section,
	(b) in the case of a grant by virtue of subsection (1)(b), the method for calculating, and any other limitations on, the amount of the grant,
	(c) the manner in which, and time or times at which, a grant by virtue of this section is to be paid,
	(d) any other terms or conditions on which such a grant is given.
	(6) In this section
	dwelling has the same meaning as in Part 2,
	registered provider of social housing includes a person falling within section (Right to acquire)(3),
	registered social landlord has the same meaning as in Part 1 of the Housing Act 1996 (c. 52),
	relevant provider of social housing means
	(a) a registered provider of social housing, or(b) a registered social landlord,
	tenant has the same meaning as in Part 2.'. [Mr.  Iain  Wright.]
	 Brought up, and read the First time.

Iain Wright: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss the following:
	New clause 32 Definition of 'community land trust'
	'Community land trust means a non-profit organisation which is an industrial and provident society, a company limited by guarantee or other incorporated body whose governing instrument contains provisions to the following effect
	(a) the primary purpose of the organisation is to hold land and other assets in order to promote the social, economic and environmental sustainability of a specified local geographic community by providing or facilitating the provision of affordable or other sub-market housing or other community-based facilities and services,
	(b) the organisation will not dispose of its land and other assets save in the furtherance of its objectives as set out in paragraph (a),
	(c) the membership of the organisation is open to organisations which are located in or persons whose principal place of residence, work or business is located in the specified community the organisation is established to serve (although the organisation may have different classes of membership),
	(d) over 50 per cent. of the governing body is elected by the members of the organisation,
	(e) the organisation is accountable to the local community through annual reporting or otherwise, and is responsive to the local community's needs and to representations made on its behalf, and
	(f) it is an organisation established to help enable the community and those who live or work there to benefit from the land or other assets it holds.'.
	New clause 33 Duty to monitor and promote re-use of brownfield land
	'(1) The HCA must identify, collate and publish up-to-date information on the availability, including type and location, of brownfield land in England at district, regional and national level.
	(2) The HCA must keep this data under review and publish its findings annually.
	(3) The HCA must promote the re-use and reclamation of brownfield land by acting as the Government's statutory adviser on brownfield land, by providing advice and grants and by commissioning, undertaking or supporting research and other projects to further best practice.
	(4) In this section brownfield land means land which has previously been developed.'.
	Government amendments Nos. 16 and 17.
	Amendment No. 151, page 2, line 4, in clause 2, at end insert
	'(d) to facilitate the provision and supply of home ownership including, in particular, low cost home ownership through community land trusts.'.
	Government amendments Nos. 18 to 24.
	Amendment No. 1, page 11, line 38, in clause 22, at end insert
	'(1A) Local authorities shall be eligible for financial assistance under subsection (1).'.
	Government amendment No. 60.
	Government amendment No. 25.
	Amendment No. 229, page 15, line 17, in clause 34, leave out from 'HCA' to end of line 18 and insert
	'must exercise its functions with the objective of contributing to sustainable development.
	(3) The Secretary of State may issue guidance to the HCA for the purposes of this section and the HCA must have regard to any guidance so issued.'.
	Amendment No. 207, line 22, in clause 35, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 208, line 23, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 209, line 27, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 210, line 29, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 211, line 33, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 212, line 35, leave out 'low cost rental accommodation' and insert 'social housing'.
	No. 213, page 15, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 214, line 40, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 215, page 16, line 1, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 216, line 3, leave out 'low cost rental accommodation' and insert 'social housing'.
	Amendment No. 217, page 16, leave out line 9 and insert
	'social housing has the meaning given by section 69.'.
	Government amendments Nos. 135 and 136.
	Amendment No. 137, page 21, line 11, in clause 48, at end insert
	'(1A) The Secretary of State may give guidance to the HCA to ensure that, in exercising its powers, the HCA does not expose any person to any risk to their health arising from exposure to electric and magnetic fields with a frequency of between 30 and 300 Hertz.'.
	Amendment No. 138, line 28, in clause 49, at end insert
	'(1A) The Secretary of State may give a direction to the HCA to ensure that, in exercising its powers, the HCA does not expose any person to any risk to their health arising from exposure to electric and magnetic fields with a frequency of between 30 and 300 Hertz.'.
	Government amendment No. 26.
	Amendment No. 139, page 39, line 6, in clause 88, at end insert
	'(3A) Pursuit of Objective 2 includes, but is not limited to, protection from the risks to health arising from exposure to electric and magnetic fields with a frequency of between 30 and 300 Hertz.'.
	Amendment No. 140, line 29, at end insert
	'(15) The Secretary of State may add to or amend the regulator's fundamental objectives as the Secretary of State thinks appropriate.'.
	Amendment No. 141, page 40, line 32, at end insert '; and
	(c) specify the proportion of housing built within 60 metres, measured in any direction, of an overhead transmission line.'.
	Amendment No. 142, page 72, line 41, in clause 180, leave out ', and'.
	Amendment No. 143, line 42, at end insert ';
	(m) the distance of housing from any overhead transmission line; and
	(n) the levels of electric and magnetic fields with a frequency of between 30 and 300 Hertz permitted in housing.'.
	Amendment No. 144, page 101, line 15, in clause 261, at end insert
	'overhead transmission line means any electric line above ground which carries or is capable of carrying electricity at or more than 275 kiloVolts,'.
	Amendment No. 233, page 138, line 13, in schedule 1, after 'year', insert
	', including how it has contributed to the achievement of sustainable development,'.
	Government amendments Nos. 27 and 28.

Martin Horwood: I should like to speak in support of new clauses 32 and 33, amendments Nos. 175, 229 and 233 and any other measures to increase the value of democracy and sustainability in the Bill.
	The Minister appeared to argue in Committee against limits on the powers of the Homes and Communities Agency, which seems to have extremely sweeping powers. Clause 3 is an extraordinary clause and defines the Principal powers of the HCA as the power to do
	anything it considers appropriate for the purposes of its objects or for purposes incidental to those purposes.
	That must be the most broadly drawn principal power ever seen in the House. The HCA also has powers to facilitate the development of land, to acquire land compulsorily and to
	dispose of land held by it in any way it considers appropriate.
	Those are major powers.
	However, the Minister said in Committee that restrictions were unnecessary, because
	Any development would have to be in accordance with the development plan. [Official Report, Housing and Regeneration Public Bill Committee, 15 January 2008; c. 269.]
	He said just now that local councils should still have a major role in place shaping, yet I fear that in having a national agency with such powers, as opposed to a local development agency, we may see local authorities' place-shaping and other powers being degraded. The question is: what kind of development plan will have to be conformed with? The Minister might be talking about the new local development frameworks, but I would not fancy putting one of those in the ring against the Homes and Communities Agency. He might also be talking about regional spatial strategies, which are now coming forward with a great deal of detail in local planning from unelected regional assemblies.
	In the south-west, we are in the latest stage of an almost endless consultation, with the examination in public panel report, which has blithely dismissed some strongly held local views and is an example of how unelected quangos and Government-appointed inspectors can run away with their own sense of self-importance at the expense of local people's views. The examination in public panel report for the south-west describes land at
	the foot of Leckhampton Hill,
	next to my constituency,
	which marks part of the western extent of the Cotswolds and is a local beauty spot of some historical interest. There are panoramic views both to and from the hill which include views across part of the Leckhampton/Shurdington land and of Cheltenham itself. A large number of draft RSS representations relate to this land and the Panel is left in no doubt that the Hill and the views from it are an amenity much appreciated by local people.
	Yet four paragraphs later all those concerns and all that respect for the local area are blithely dismissed. The panel simply says:
	We are also content, from our own inspection of the area, that there is scope for sustainable development here without harm to the AONB, the outlook from Leckhampton Hill or to the local environment. Regional Flood Risk appraisal has cleared the way for any flooding issue to be addressed through later strategic flood risk appraisal.
	Presumably the panel did not see the area when it was all under water last July.
	Strongly held local views are being dismissed by such quangos after years of earlier consultation in which local elected and community representatives were more or less of one mindstrongly in favour of more social housing, more urban regeneration and more appropriate small developments around villages, whose shops, post offices and schools are dying through a lack of people, and in general opposed to urban extensions around already affluent towns such as Cheltenham. What do we get in draft after draft of the regional spatial strategy? We get urban extensions around already affluent towns, where, historically, large quantities of land have already been released over decades, with no discernable impact on relative house prices.

Iain Wright: I apologise for taking up the hon. Gentleman's time. I am listening to his arguments closely and I am sure that you would rule him out of order if he strayed too much into a Second Reading-type speech, Mr. Deputy Speaker, but is he opposed to the creation of the Homes and Communities Agency?

Martin Horwood: My principal concern is about powers that are exactly analogous to those held by other quangospowers to consult but never to change the decisions being consulted on. For instance, 8,100 houses in Cheltenham have been accepted by everybody locally for development in the urban area, but that has been pushed up to 13,800 houses, which will therefore overflow into urban sprawl, over miles and miles of green land and green-belt areas. Inevitably, we now have a growing cross-party campaign called Save the Countryside. When we have bodies that trust the people, new housing will be accepted. That is the gist of many of the amendments that we discussed earlier.

Lembit �pik: To respond to what the Minister said, I see that my hon. Friend has assiduously read the reports of the Public Bill Committee. He is citing the exact point that I made, which is that the HCA has incredible powersindeed, almost unfettered powers. He is expressing concern that the HCA has such a wide remit that it can walk into just about any other quango's activities without having to check with anybody else. I agree about that concern, and I said so in Committee.

Martin Horwood: I am grateful to my hon. Friend for his support; that is exactly the point that I am making. If we fail to trust the people and empower such organisations simply to walk into other areas and bully and threaten people, the barriers will go up and people's nimby instincts will come out. Voices ignored so far in local areas mean that local people will become determined to shout louder.
	The numbers that the HCA and others will be involved in handing down from the Department are not locally determined and are based on models about which many questions that were asked two years ago by the then Select Committee on the Office of the Deputy Prime Minister, of which I was a member, need to be answered. The truth is that some of those models might all be for nothingthat is, we need only change a few parameters in them and they might not even deliver the affordability at the macro level that they are designed to support. Indeed, one parameter has spectacularly changed, namely the growth assumptions behind such large numbers of new houses.
	The growth assumptions behind the numbers in the south-west are based on an annual economic growth rate of between 2.8 and 3.2 per cent. sustained consistently over 20 years. However, those are the kind of growth rates that the Chancellor can now only dream of, so I would be interested to hear the Minister's response on that. According to the Treasury's own projections, those numbers are now simply wrong. However, as a result of new growth point status initiatives, to which I hope Cheltenham's Conservative administration will not sign upalthough the signs are not goodgreenfield sites may well be developed first and not last, because the growth points focus on greenfield development. I hope that the Minister can spare the time to respond to that point. If we are not careful, when the economic crisis bites, greenfield sites may well end up being the only land that is developed. That is why the amendments that refer to sustainability and the prioritisation of greenfield sites over brownfield sites are so important.
	The measures have implications for quality of life and for the environment, in terms of climate change and flooding. The Foresight report from a few years ago identified urbanisation as a key factor in the increased likelihood of floodinga factor high up the priority list for many of my constituents, as 600 properties in Cheltenham flooded last year. The South West of England Development Agency responded in its regional spatial strategy by increasing the number of houses in the Cheltenham and Tewkesbury area by 3,700, and now yet another unaccountable, unelected quango is being created under the Bill. There is nothing in the Bill that persuades me that the Homes and Communities Agency would ever side with local people who have local knowledge, or with local elected representatives.

Iain Wright: I am not entirely certain whether the hon. Gentleman was in the House when I mentioned the issue in debate on the first group of amendments, but Sir Bob Kerslake, the chief executive designate of the Homes and Communities Agency, recently said in a letter, with regard to the transitional arrangements, that he sees the agency as the best local delivery partner for local authorities. The measures will only improve housing supply and regenerate infrastructure and communities if there is a close link between the agency and local authorities. Does the hon. Gentleman not agree?

Martin Horwood: The Minister has put his finger on one of the key problems with the Bill. In trying to reassure the House that the Bill provides enough safeguards, democratic measures and provisions on the sustainability of the new agency, he refers us to a letter from its designated chair and not to any provision in the Bill. If we are simply to rely on the good will of an appointed official, that is not good enough.
	As I say, I do not have any confidence that the Homes and Communities Agency will ever side with local people who have local knowledge, or with local elected representatives, against the faceless bureaucrats and Government inspectors who are simply doing the Government's bidding and ignoring important democratic and environmental factors. Amendments Nos. 175, 229 and 233 and new clauses 32 and 33 would go some small way towards addressing that imbalance and I strongly support them.

Grant Shapps: I should like to sing the praises of new clause 32, which I think will have some backing in all parts of the House. It is all about community land trusts. The Minister will remember that in Committee we had a bit of discussion about CLTs and whether they could prosper if they were legally defined as an entity. As he knows, the purpose of CLTs is to ensure that affordable and other sub-market housing is available to people at below market rents or costssomething of which I think he would approve. That would make a great deal of sense in an environment where we are trying to do everything possible to provide low-value and affordable housing. In some areas of the country, local people are effectively priced out of the housing market because house prices are not at the national average, which is eight or 10 times salary, but are 20 times the local average salary. Community land trusts can do a great deal to assist in that regard, and new clause 32 seeks legally to define the CLTs once again.
	The Minister told us in Committee that it was not necessary to define CLTs, as that would not be of any great advantage to them; he said that legislation already provides for them and that they are already being created, and that that proved that the Bill did not need to address the issue of definition in any greater detail. However, I have since discovered that he is wrong. I recently visited a good CLT in Cornwall, where a group of residents have got together and have managed to purchase some land. It is called a self-built community land trust. I commend it to him; it is in the village of Rock. The Minister will be interested to hear that when I say self-built, that is what I mean. At 5.30 pm when the residents have finished work, and at the weekend, they go and build the community themselves, literally.
	The residents spent a full year trying to get funding for that very sound project. There was no real reason why they should not get funding; it was nothing to do with the more recent credit crunch. The reason they could not get the funding was that no commercial organisation understood what a CLT was, despite the fact that the residents had the backing of their local housing association, which was trying to explain the situation. When lending societies looked at the plan they could not get their heads around it, because community land trusts are not defined anywhere in law. Along with amendment No. 151, new clause 32 would solve that problem.

David Drew: The hon. Gentleman is right about the Labour support for community land trusts. As someone who has worked with one for five years, I could wax lyrical about them.
	I approve of the intention of the new clause, and hope that the Government are listening carefully. What worries me, however, is what worried me in Committee. I am not sure that the wording is as inclusive as it needs to be. The implication is that the new clause is about low-cost home ownership rather than what I want to see, which is a mixture of ownership and renting. Will the hon. Gentleman specify exactly what he thinks the new clause will do?

Grant Shapps: The hon. Gentleman has made an excellent point. It should be possible for community land trusts to cover both low-cost renting and home ownership. I am very willing to work on the wording of the definition, and if the Minister will join me in doing so I shall be very pleased. However, although he has shown good will over other parts of the Bill, it seems to me that, for no good reason, he is sticking to the view that CLTs should not be included in it. I have given him on-the-ground evidence about a CLT that went through the trauma of trying to obtain funds when the only obstacle was the absence of a legal definition.

Margaret Moran: I am a little confused. Could the hon. Gentleman be a little more explicit about the obstacle in that case? When I was chair of housing in Lewisham, we sponsored some of the first self-build projects in the country. They were based on the co-op model and experienced no difficulty in securing funds, through commercial sponsors, through the Housing Corporation or, indeed, through our own local authority.
	May I also echo the point made by my hon. Friend the Member for Stroud (Mr. Drew)? For many of us, community land trustswhich were created by the Co-operative Development Society, to which all praise is duewere very much about affordable rented housing rather than home ownership.

Grant Shapps: I accept that entirely. They also enable people to shape their communities as they wish. The CLT that I mentioned wanted to ensure that local people could be housed locally. It was able to define tenants or buyers on the basis of their local roots, which I think makes a great deal of sense.
	As for the obstacle in that case, the members of the CLT spent a considerable amount of time approaching a large number of lending institutions. They were asked to explain exactly what a community land trust was. When they had explained, in plain English, they were asked Can you tell us where, in law, we can find out about this mechanism? As we all know, it is not defined anywhere in law, and as a resultand I am not making this upthe CLT was unable to obtain funding. I am pleased to hear that elsewhere in the country and in earlier times, perhaps under a slightly different guisethe hon. Lady mentioned co-operativesothers have been funded, but CLTs are very much at the beginning of their journey. We know that the Minister has arranged trials to establish how they could be made to work elsewhere.
	If the commitment is there and both sides of the House agree, it is reasonable to try to proceed slightly more quickly. If we can learn from practical experience of the problems experienced by those on the ground, there is every reason to include this provision in the Bill. I cannot think of any way in which it would damage the Government's other objectives.

Simon Hughes: The hon. Gentleman will know that, along with friends, I have supported his proposal. We are keen for there to be a definition, but it is important for us to get it right. It seems to me that a new clause and an amendment that would widen the aims of the Homes and Communities Agency, whatever its deficits, are worth considering. They should include both ownership and renting, and perhaps shared ownership as well. I think that we should allow the proposal to be taken away after the debate, but should ensure that there is consensus before it reaches the House of Lords.

Grant Shapps: I am interested to hear the hon. Gentleman's comments. I have to let the Minister know that I am keen to strip this out and divide on new clause 32, although I will listen with great interest to find out whether he believes that, in the interest of trying to provide affordable housing to local communities in an all-round beneficial way, the provisions could form part of the Bill.

Jeremy Corbyn: A number of interventions have drawn attention to the very good principle behind housing co-operatives, co-operative ownership, co-operative development and management of co-operatives. I have many such organisations in my constituency and they work extremely well. What would be the effect of the new clause on the development of housing co-ops?

Grant Shapps: There would be no direct impact one way or the other, but I pay tribute to the work of co-operatives in creating affordable housing. There are one or two in my patch and I see many others around the country. I believe they contribute greatly to a form of housing that is both decent and affordable.
	Let me repeat that if the Minister reflects at greater length on the new clause and perhaps undertakes to introduce a similar provision in the other place, I would be happy not to press it to the vote, but as things stand, I am afraid that I would want it pressed to a Division.

Iain Wright: I had not intended to speak to this group of amendments, as I wanted right hon. and hon. Members to be able to contribute to the debate. If I may, however, I would like to make a few points. I am genuinely excited by this part of the Bill and I really believe that the Homes and Communities Agency will be the vehicle to help us to build 3 million homes by 2020, playing a key role in the regeneration of our infrastructure and our communities. Indeed, the agency's ability to hitor should that be break?the ground and deliver is absolutely key to our housing policy. I stress, however, that it is not just about improving the supply and quality of housing in England, as clause 2 reinforces the importance of the regeneration or development of land, infrastructure and communities, which was touched on by the hon. Member for Cheltenham (Martin Horwood).
	I pay particular tribute to my hon. Friend the Member for City of Durham (Dr. Blackman-Woods), who argued in Committee that we needed to go further in respect of the agency's responsibilities for sustainable development. I undertook to consider the matter in more detail, including whether it would be appropriate to include sustainable development in the objects of the HCA, and I have now concluded that it would. Amendments Nos. 16 and 17 are designed to add to the agency's objects the need
	to contribute to the achievement of sustainable development,
	thus placing sustainability at the heart of what the agency does, and demonstrating and reinforcing the importance of sustainability not just to the agency, but to the Government.
	Amendment No. 25 would delete clause 34, but I think it is no longer necessary. On that basis, I hope that the hon. Members for Montgomeryshire (Lembit pik) and for St. Ives (Andrew George) will not press their amendment No. 229, which is also unnecessary. May I say that through sheer tenacity and expertise in and command of the argument, my hon. Friend the Member for City of Durham has moved Government policy on these matters quite considerably? She has placed sustainable development right at the heart of the agency's objects. I pay sincere tribute to her and am happy to give way to her.

Roberta Blackman-Woods: I thank the Minister for accepting my amendment in Committee. It is indeed important to align housing policy with planning policy, particularly in respect of planning policy statements 1 and 3. It is also essential that the new agency looks at the infrastructure, so that the necessary schools, health centres, roads and so forth are in place to support these new communities.

Iain Wright: My hon. Friend makes an important point. Although the rhetoric has been about 3 million new homes, I have said time and again that this is not just about more homes, important though that is to address the housing needs of this country; it is about better homes and greener homes. That is what the Bill will do for design, with the Academy for Sustainable Communities being placed in the agency and with the requirements in the code for sustainable homes. It is vital that homes, if they are to be truly sustainable, are not just plonked in a field; we need the related infrastructure, such as health facilities and schools. I hope that the HCA will build on the work done by English Partnerships in creating 11 new schools to provide the confidence to the market to ensure that development takes place. This is not just about more homes, important though they are; it is about better designed, greener homes in an appropriate setting, with excellent community infrastructure.

Martin Horwood: I certainly agree that homes should not be just plonked in fields, but I warn the Minister that that is exactly what the implications of his policy are in my constituency. He keeps on mentioning the figure of 3 million. Will he answer my specific point about the economic growth assumptions behind the model that produced that number now being inappropriate in the light of the Government's own growth forecasts?

Iain Wright: I am happy to be ruled out of orderthat sounds like a speech on Second Readingbut we have not been building the homes that we require in this country for a generation. Since the 1970sfor 35 yearshousing supply, as opposed to housing demand, has been woefully inadequate. We need to do something about that. We need to take into account the rising aspirations of the people of this country and the social changes. We are all living longer and need appropriate homes. More of us live on our own, perhaps as a result of marital breakdown. We need to do something about that. We need the homes that this country wants and deserves. To do that, under the evidence-based policy that we have put in place, we need to build 240,000 homes a year, and I hope that the whole House will provide consensus on that.

Lembit �pik: That would mean an increase of 239,840 a year on what is being built at the moment. Hon. Members should not worry; we have not got the time to have that argument at the moment. The Minister mentioned amendment No. 229. Under normal circumstances, I would have pressed it to a vote because, as he knows, I feel strongly that even though the Government talk strongly about the environment, the amendment would have given the HCA a formal responsibility to respond to the insightful position of the Royal Society for the Protection of Birds about enshrining the HCA's environmental responsibilities. Is he willing to discuss how we might ensure that the spirit of that amendment is included in the Bill, even if we do not press it to a vote?

Iain Wright: Placing sustainable development at the heart of what the agency does by including that in its objects under clause 2 gives a clear signal about how important we think that is.

Nick Hurd: rose

Iain Wright: Before I give way to the hon. Gentleman, I shall rise to the bait: the hon. Member for Montgomeryshire suggests that we are not building enough homes. Last year, 199,000 homes were built in this country. That is more than have been built for quite some considerable time. I admit that, in the economic climate we face at the moment, the challenge is that we must literally build on that, and I am keen to work on that. My right hon. Friend the Minister for Housing, who is sitting on the Front Bench tonight, is absolutely assiduous in ensuring that we provide lender confidence to help to do that. We need to build on the increase in what we are doing to address the housing needs of this country.

Nick Hurd: The Minister has been passionate about the sustainability requirements on the HCA. May I press him to clarify what requirements the Government are prepared to place on the HCA and the regulator in relation to the protection of public health? He will know that, in the back of my mind, I am thinking about the associationI put it no stronger than thatbetween the increased risk of leukaemia in children and the location of dwellings near high-voltage power lines. We discussed that thoroughly in Committee, when I tabled some amendments. What is the Government's attitude towards placing requirements on the HCA in that context?

Iain Wright: I pay tribute to the hon. Gentleman for the sensitive manner in which he advanced his case in Committee. I pledged that I would meet him and stakeholders regularly to discuss the points he raised, because I am very concerned about them not only as a Minister but as a father. I told him that, before the Easter recess, I would be provided with advice on how best to move forward, and that is in the pipeline. I pledge to ensure that he is made fully aware of the matter throughout, and that we will work together constructively to make sure that any concern he has is addressed.

Jeremy Corbyn: On the sustainability of sites, which the Minister has referred to a number of times, I am concerned about the rigid obsession with greenfield versus brownfield sites. Quite often, brownfield sites obviously present an opportunity in some inner urban areas not only for housing but for improving living conditions and everyone's quality of life by creating a new open space in an area that does not have any. Will the agency be flexible enough to recognise the possibility of improving people's lives in densely built-up urban areas by not necessarily developing every last inch of a brownfield site?

Iain Wright: That is an important point. The presumption is always to have brownfield development, and we have been very successful in that regard over the past 10 years: some 75 per cent. of development is now brownfield. However, my hon. Friend makes the point that we must not accept the myth that brownfield is essentially factories and that greenfield is the rolling, beautiful hills of the English countryside. That is not the case, and the agency needs to have the flexibility to be able to allow an area that is designated as greenfield to be classed as just shrubbery if it can be built on without any loss to the bio-environment. With regard to planning and sustainability, we could in many respects go further and faster to make sure we attract better biodiversity. I therefore agree with my hon. Friend on this matter.
	The Government have tabled amendments Nos. 18, 27 and 28 to take account of the importance of London in the national housing market, and its particular governance arrangements. The amendments place the agency under a duty to have regard to the Mayor's recommendations contained in the London housing strategy. They will enable the Mayor to recommend to the Secretary of State how much money should be allocated to the HCA in respect of housing in Greater London. They will also enable the Mayor to recommend to the agency how it should exercise its functions of giving housing financial assistance in Greater London, including such matters as the amounts that should be given for different purposes and the number, type, tenure and location of houses that should be provided through housing financial assistance. We are providing the Mayor with more scope to shape the nature of housing and regeneration in Londonthat will be a key priority for Ken Livingstone as he secures a third term as Mayor in the next few weeks. All this is also consistent with our recent announcement of the proposal that the agency is to establish a London sub-committee to be chaired by the Mayor, with the chief executive of the agency, Sir Bob Kerslake, as its vice-chair.
	On that basis, London's interests are appropriately served, which is why I cannot accept the Liberal Democrat amendment No. 230, proposing a seat on the national HCA board for a representative from London local authorities. I am keen to avoid narrow sectional interests at board level. An approach such as that which the amendment proposes would prevent full representation from other interest groups; all might be perfectly reasonable and have a perfectly valid case, but be impossible to accommodate. Such a move would make the board unwieldy and hinder its ability to deliver the necessary improvements in housing supply and quality, and in regeneration, investment and infrastructure. On that basis, I hope the amendment will be withdrawn.
	I was interested in a point made by the hon. Member for Welwyn Hatfield (Grant Shapps), who does not appear to be listening at present. Community land trusts are very important. I have a vested interest, as I have one in my constituency. I pay tribute to my hon. Friend the Member for Stroud (Mr. Drew) for the assiduous work he has been doing to ensure that CLTs are an essential part of the housing offer for the 21st century. However, nothing that was said on this matter changed the opinion I formed in Committee, which is that we do not want to prescribe too overtly with regard to the various mechanisms by which the agency might help to deliver housing. CLTs are an important part of the new environment. There are real benefits in retaining land in order to ensure that we have affordable housing and renting in perpetuity, but we must be aware of the future-proofing issue.

David Drew: I thank my hon. Friend for his comments, and I would ask him to bear something in mind if it is possible to get an agreed legal definition. I am interested in leasehold enfranchisement, because we must ensure that we have a range of different forms of ownership. Will he at least keep an open-mind, as there is a need for some recognition in statute of this now very important potential form of home provision?

Iain Wright: I reiterate what I said about my respect for my hon. Friend on this matter. I am keen to see CLTs work incredibly well in the next few months and years. I have one in my constituency, and it is important.
	A concern that I had in Committee and when I met CLT representatives in February was the need to avoid future-proofing in terms of the agency. I stand by my statement in Committee that I am a big fan of local housing companies, whereby local authorities provide the land and private developers provide the construction skills in a joint venture, but I would not want to include that provision in the Bill either. I am interested in the experiences that the hon. Member for Welwyn Hatfield has had with regard to Cornwall, and I am keen to invite him to a meeting to discuss those.
	One of the key things that we must do relates to a slightly wider and perhaps more fundamental point. Given the economic difficulties across the Atlantic and the relatively risk-averse nature of financial institutions, how can we still inspire confidence in the financial markets in order to help to build the housing that we need? My right hon. Friend the Minister for Housing will play a key role in inspiring lender confidence through the meetings that she has. We need to address that risk-averse nature; it is important that we do that. I am keen to work with all those available to help that to happen. I am keen to discuss a way forward on the particular circumstances mentioned by the hon. Member for Welwyn Hatfield, and I hope he would agree with me on that basis. If he wishes to intervene, I would be happy to give way, but I now want to bring my hon. Friend the Member for Luton, South (Margaret Moran) into the discussion.

Margaret Moran: My hon. Friend's passion for and commitment to community land trusts is in no doubt. Will he undertake to report back to us on the pilot, which has had difficultiesCooperative Development Services has been involved in thatso that we can all learn from that experience? Will he re-examine the issue of value for community rather than pure value for money when the disposal of public sector land is being considered? We debated that issue at length in Committee.

Iain Wright: I am happy to give that pledge, because I am passionate about ensuring that CLTs work. I do not think that this is about just one option; a range of options, such as joint ventures and local housing companies, could be involved. I do not think that we should be prescribing. Let me return to a theme of the Committeethe list principle. I am looking at the right hon. Member for North-West Hampshire (Sir George Young) when I say that. I am keen to avoid being too prescriptive and including that list in the Bill.

Daniel Rogerson: I was hoping to make a speech, but it seems that time is against us this evening. The situation in my constituency has been mentioned. I have met Cornwall Rural Housing Association to examine this issue. It has attempted to make progress on other schemes, but the Housing Corporation has given it the message that it would like to be able to give the CRHA money but does not think it is able to do so because it is not sure how community land trusts work and how it can make that approach happen. I would be interested to hear the Minister's response on this. I hope that he will meet me and other hon. Members to ensure that we can take this forward.

Iain Wright: I am keen to meet the hon. Gentleman to talk about that, because I want these things to work. My concern is not that what is in the Bill is bothering lenders, but rather that after all that has happened across the Atlantic, where financial institutions have had their fingers burned over the past few months, institutions are becoming more risk-averse. This House must stop downplaying the fundamental health of the British economywe should not talk ourselves into a recession, especially when the fundamentals are sound. Also, we must work with lenders to ensure that they have confidence, but we do not necessarily need to prescribe this in the Bill.

Grant Shapps: I appreciate the Minister's consensual approach to the Billwe had the same approach in Committeebut I am not convinced by his argument. He is arguing that there is a great deal of uncertainty in the market, but he is failing to do the one thing in the Bill that would create certainty. He is failing to include in it a provision about what a community land trust is. We describe all sorts of things in law, and many things are described in this Bill. He has no problems tabling 147 amendments to the Bill today. The one new clause that I am discussing could do a great deal of good for CLTs, and I would have thought that he welcomed it. I am not convinced that I should seek to withdraw it.

Iain Wright: I reiterate the need to future-proof the Bill to ensure that innovative products that will be introduced in the next few years are available without being prescribed. I am happy to work with hon. Members from all parties to ensure that we can make community land trusts and other vehicles, such as local housing companies, work, and work incredibly well. There is a wider point about financial institutions and their attitude to risk, but I am keen to ensure that we make those bodies work.
	I want to suggest, particularly as regards this group of amendments and part 1 of the Bill, that the Homes and Communities Agency will have a key role and the financial muscle to provide good investment in infrastructure
	 It being Nine o'clock, Mr. Deputy Speaker , pursuant to Order [27 November], proceeded to put forthwith the Question already proposed from the Chair.
	 Question put and agreed to.
	 Clause read a Second time, and added to the Bill.
	Mr. Deputy Speaker  then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.

New Clause 15
	  
	Companies exempt from audit

'(1) This section applies in relation to a registered provider which
	(a) is a registered company other than a charity, and
	(b) is exempt from the audit requirements of the Companies Act 2006 by virtue of section 477 of that Act (small companies' exemption).
	(2) The directors of the company shall cause a report to be prepared in accordance with section [exempt companies: accountant's report] and made to the company's members in respect of the company's individual accounts for any year in which the company takes advantage of its exemption from audit.
	(3) Individual accounts has the same meaning as in section 396 of the Companies Act 2006.'.

New Clause 16
	  
	Exempt companies: accountant's report

'(1) The report required by section [companies exempt from audit] must be prepared by a person (the reporting accountant) who is eligible under section [exempt companies: reporting accountant].
	(2) The report must state whether the individual accounts are in accordance with the company's accounting records kept under section 386 of the Companies Act 2006.
	(3) On the basis of the information contained in the accounting records the report must also state whether
	(a) the accounts comply with Part 15 of the Companies Act 2006;
	(b) the company is entitled to exemption from audit under section 477 of that Act (small companies' exemption) for the year in question.
	(4) The report must give the name of the reporting accountant and be signed and dated.
	(5) The report must be signed
	(a) where the reporting accountant is an individual, by that individual, and
	(b) where the reporting accountant is a firm, for and on behalf of the firm by an individual authorised to do so.
	(6) In this section and sections [exempt companies: reporting accountant] and [application of Companies Act] firm has the meaning given by section 1173(1) of the Companies Act 2006.'.

New Clause 17
	  
	Exempt companies: reporting accountant

'(1) A person is eligible for appointment by a company as a reporting accountant under section [exempt companies: accountant's report] if
	(a) either of the following conditions is satisfied, and
	(b) the person would not be prohibited from acting as auditor of the company by virtue of section 1214 of the Companies Act 2006.
	(2) Condition 1 is satisfied if the person is a member of a body listed in subsection (4) and under its rules
	(a) the person is entitled to engage in public practice, and
	(b) is not ineligible for appointment as a reporting accountant.
	(3) Condition 2 is satisfied if the person
	(a) is subject to the rules of a body listed in subsection (4) in seeking appointment or acting as a statutory auditor under Part 42 of the Companies Act 2006, and
	(b) under those rules, is eligible for appointment as a statutory auditor under that Part.
	(4) The bodies mentioned in subsections (2) and (3) are
	(a) the Institute of Chartered Accountants in England and Wales,
	(b) the Institute of Chartered Accountants of Scotland,
	(c) the Institute of Chartered Accountants in Ireland,
	(d) the Association of Chartered Certified Accountants,
	(e) the Association of Authorised Public Accountants,
	(f) the Association of Accounting Technicians,
	(g) the Association of International Accountants,
	(h) the Chartered Institute of Management Accountants, and
	(i) the Institute of Chartered Secretaries and Administrators.
	(5) The Secretary of State may by order amend the list of bodies in subsection (4).
	(6) References in this section to the rules of a body are to rules (whether or not laid down by the body itself) which the body has power to enforce and which are relevant for the purposes of Part 42 of the Companies Act 2006 (statutory auditors) or this section; and this includes rules relating to the admission and expulsion of members of the body so far as relevant for the purposes of that Part or this section.
	(7) An individual or a firm may be appointed as a reporting accountant; and section 1216 of the Companies Act 2006 applies to the appointment of a partnership constituted under the law of
	(a) England and Wales,
	(b) Northern Ireland, or
	(c) any other country or territory in which a partnership is not a legal person.'.

New Clause 18
	  
	Application of Companies Act

'(1) The provisions of the Companies Act 2006 listed in subsection (2) apply to the reporting accountant and a reporting accountant's report as they apply to an auditor of the company and an auditor's report on the company's accounts (with any necessary modifications).
	(2) The provisions are
	(a) sections 423 to 425 (duty to circulate copies of annual accounts),
	(b) sections 431 and 432 (right of member or debenture holder to demand copies of accounts),
	(c) sections 434 to 436 (requirements in connection with publication of accounts),
	(d) sections 441 to 444A (duty to file accounts with registrar of companies),
	(e) section 454(4)(b) and regulations made under that provision (functions of auditor in relation to revised accounts),
	(f) sections 499 to 502 (auditor's right to information), and
	(g) sections 505 and 506 (name of auditor to be stated in published copies of report).
	(3) In sections 505 and 506 as they apply by virtue of this section in a case where the reporting accountant is a firm, any reference to the senior statutory auditor shall be read as a reference to the person who signed the report on behalf of the firm.'.

New Clause 19
	  
	Exempt companies: extraordinary audit

'(1) This section applies where, in accordance with section [companies exempt from audit] a company appoints a reporting accountant to prepare a report in respect of its accounts for any year.
	(2) The regulator may require the company to
	(a) cause a qualified auditor to audit its accounts and balance sheet for that year, and
	(b) send a copy of the report to the regulator by a specified date.
	(3) A requirement may not be imposed before the end of the financial year to which it relates.
	(4) Qualified auditor, in relation to a company, means a person who
	(a) is eligible for appointment as a statutory auditor of the company under Part 42 of the Companies Act 2006 (statutory auditors), and
	(b) is not prohibited from acting as statutory auditor of the company by virtue of section 1214 of that Act (independence requirement).'.

New Clause 20
	  
	Interim manager

'(1) During a moratorium the regulator may appoint an interim manager of the registered provider.
	(2) An appointment may relate to the registered provider's affairs generally or to affairs specified in the appointment.
	(3) Appointment shall be on terms and conditions (including as to remuneration) specified in, or determined in accordance with, the appointment.
	(4) An appointment under this section shall come to an end with the earliest of the following
	(a) the end of the moratorium,
	(b) the agreement of proposals under section 146, or
	(c) a date specified in the appointment.
	(5) An interim manager shall have
	(a) any power specified in the appointment, and
	(b) any other power in relation to the registered provider's affairs required by the manager for the purposes specified in the appointment (including the power to enter into agreements and take other action on behalf of the registered provider).
	(6) But an interim manager may not
	(a) dispose of land, or
	(b) grant security over land.'.

New Clause 21
	  
	Right to acquire

'(1) The tenant of a dwelling in England has a right to acquire the dwelling if
	(a) the landlord is a registered provider or a registered social landlord,
	(b) the tenancy is within subsection (2),
	(c) the provision of the dwelling was publicly funded,
	(d) the dwelling has remained in the social rented sector ever since that provision, and
	(e) the tenant satisfies any qualifying conditions applicable under Part V of the Housing Act 1985 (c. 68) (as it applies by virtue of section [right to acquire: supplemental]).
	(2) A tenancy is within this subsection if it is
	(a) an assured tenancy, other than an assured shorthold tenancy or a long tenancy, or
	(b) a secure tenancy.
	(3) The reference in subsection (1)(a) to a registered provider includes
	(a) a person who provided the dwelling in fulfilment of a condition imposed by the HCA when giving assistance to the person;
	(b) a person who provided the dwelling wholly or partly by means of a grant under section 27A of the Housing Act 1996 (c. 52).'.

New Clause 22
	  
	Interpretation: publicly funded

'(1) The provision of a dwelling was publicly funded if any of the following conditions is satisfied.
	(2) Condition 1 is that
	(a) the dwelling was provided by a person in fulfilment of a condition imposed by the HCA when giving assistance to the person, and
	(b) before giving the assistance the HCA notified the person that if it did so the provision of the dwelling would be regarded as publicly funded.
	(3) Condition 2 is that the dwelling was provided wholly or partly by using sums in the disposal proceeds fund of
	(a) a registered provider, or
	(b) a registered social landlord.
	(4) Condition 3 is that 
	(a) the dwelling was acquired by a registered provider, or a registered social landlord, on a disposal by a public sector landlord,
	(b) the disposal was made on or after 1st April 1997, and
	(c) at the time of the disposal the dwelling was capable of being let as a separate dwelling.
	(5) Condition 3 is not satisfied if the dwelling was acquired in pursuance of a contract made, or option created, before 1st April 1997.
	(6) Condition 4 is that
	(a) the dwelling was provided wholly or partly by means of a grant under section 18 or 27A of the Housing Act 1996 (c. 52), and
	(b) when the grant was made the recipient was notified under section 16(4) of that Act that the dwelling was to be regarded as funded by means of such a grant.'.

New Clause 23
	  
	Interpretation: remained in the social rented sector

'(1) This section applies for the purposes of determining whether a dwelling has remained in the social rented sector.
	(2) A dwelling shall be treated as having remained in the social rented sector for any period during which
	(a) the freeholder was a person within subsection (3), and
	(b) each leaseholder was either a person within that subsection or an individual holding otherwise than under a long tenancy.
	(3) A person is within this subsection if the person is
	(a) a registered provider,
	(b) a registered social landlord, or
	(c) a public sector landlord.
	(4) A dwelling provided wholly or partly by means of a grant under section 27A of the Housing Act 1996 (c. 52) shall also be treated as having remained in the social rented sector for any period during which it was used exclusively for permitted purposes by
	(a) the recipient of the grant, or
	(b) any person treated as the recipient by virtue of section 27B of that Act.
	(5) Permitted purposes are purposes for which the grant was made and any other purposes agreed by the Housing Corporation or the HCA.
	(6) Where a lease of a dwelling has been granted to a former freeholder in pursuance of paragraph 3 of Schedule 9 to the Leasehold Reform, Housing and Urban Development Act 1993 (c. 28) (mandatory leaseback to former freeholder on collective enfranchisement) the reference in subsection (1)(a) above to the freeholder shall be construed as a reference to the leaseholder under that lease.'.

New Clause 24
	  
	Interpretation: other expressions

'(1) The definitions in this section apply to sections [right to acquire] to [interpretation: remained in the social rented sector].
	(2) The HCA gives assistance to a person if it
	(a) transfers housing or other land to the person,
	(b) provides infrastructure to the person, or
	(c) gives financial assistance to the person.
	(3) References to a registered social landlord are to a body which, at the time to which the reference relates, was a registered social landlord within the meaning of Part 1 of the Housing Act 1996 (c. 52) as it then had effect.
	(4) Leaseholder does not include a mortgagee.
	(5) Long tenancy has the same meaning as in Part V of the Housing Act 1985 (c. 68).
	(6) A person provides a dwelling if the person
	(a) acquires, constructs, converts, improves or repairs housing or other land for use as a dwelling, or
	(b) ensures such acquisition, construction, conversion, improvement or repair by another.
	(7) Public sector landlord means anyone falling within section 80(1) of the Housing Act 1985 (c. 68).'.

New Clause 25
	  
	Right to acquire: supplemental

'(1) Section 17 of the Housing Act 1996 (c. 52) (right to acquire: supplemental) applies in relation to the right to acquire under section [right to acquire] of this Act with the modifications set out below.
	(2) The modifications are as follows
	(a) references to the right to acquire under section 16 of the 1996 Act shall be treated as references to the right to acquire under section [right to acquire] of this Act,
	(b) references to the Welsh Ministers shall be treated as references to the Secretary of State,
	(c) the reference to registered social landlords shall be treated as a reference to registered providers, and
	(d) the reference to a resolution of the National Assembly for Wales shall be treated as a reference to a resolution of either House of Parliament.'.

New Clause 26
	  
	Right to acquire: consequential amendments

'(1) In section 16 of the Housing Act 1996 (c. 52) (right to acquire)
	(a) for subsection (1) substitute
	(1) The tenant of a dwelling in Wales has a right to acquire the dwelling if
	(a) the landlord is a registered social landlord or a registered provider of social housing,
	(b) the tenancy is
	(i) an assured tenancy, other than an assured shorthold tenancy or a long tenancy, or
	(ii) a secure tenancy,
	(c) the dwelling was provided with public money and has remained in the social rented sector, and
	(d) the tenant satisfies any further qualifying conditions applicable under Part V of the Housing Act 1985 (the right to buy) as it applies in relation to the right conferred by this section.,
	(b) in subsection (2)(c) after registered social landlord insert or a registered provider of social housing, and
	(c) in subsection (3)(a) and (b)(ii) after registered social landlord insert , a registered provider of social housing.
	(2) In section 16A(1) (extension of section 16 to dwellings funded by grants under section 27A) after the first dwelling insert in Wales.
	(3) In section 20 (purchase grant where right to acquire exercised)
	(a) in subsection (1) after landlords insert and registered providers of social housing, and
	(b) in subsection (4) after landlord insert or registered provider of social housing.
	(4) In section 21 (purchase grant in respect of other disposals)
	(a) in subsection (1)
	(i) after landlords insert and registered providers of social housing, and
	(ii) after dwellings insert in Wales,
	(b) in subsection (2)
	(i) after section 16 insert or by section [Right to acquire] of the Housing and Regeneration Act 2008, and
	(ii) for landlord's substitute landlord or provider (as the case may be), and
	(c) in subsection (4) after landlord insert or registered provider of social housing.'.

New Clause 27
	  
	Exercise of enforcement powers

'(1) This section applies where the regulator is deciding
	(a) whether to exercise a power under this Chapter,
	(b) which power under this Chapter to exercise, or
	(c) how to exercise a power under this Chapter.
	(2) The regulator shall consider
	(a) the desirability of registered providers being free to choose how to provide services and conduct business;
	(b) whether the failure or other problem concerned is serious or trivial;
	(c) whether the failure or other problem is a recurrent or isolated incident;
	(d) the speed with which the failure or other problem needs to be addressed.'.

New Clause 28
	  
	Amalgamation

'(1) This section applies if as a result of an inquiry under section 192 or an audit under section 196 the regulator is satisfied that
	(a) a non-profit registered provider which is an industrial and provident society has failed to meet a standard under section 180 or 181,
	(b) the affairs of a non-profit registered provider which is an industrial and provident society have been mismanaged in relation to social housing, or
	(c) the management of social housing owned by a non-profit registered provider which is an industrial and provident society would be improved if the provider were amalgamated with another industrial and provident society.
	(2) The regulator may make and execute on behalf of the society an instrument providing for the amalgamation of the society with another industrial and provident society.
	(3) An instrument providing for the amalgamation of a society (S1) with another has the same effect as a resolution by S1 under section 50 of the Industrial and Provident Societies Act 1965 (c. 12) (amalgamation of societies by special resolution).
	(4) A copy of an instrument shall be sent to and registered by the Financial Services Authority.
	(5) An instrument does not take effect until the copy is registered.
	(6) The copy must be sent for registration during the period of 14 days beginning with the date of execution; but a copy registered after that period is valid.
	(7) Any body created by virtue of an amalgamation
	(a) must be registered by the regulator and designated as a non-profit organisation, and
	(b) pending registration shall be treated as registered and designated as a non-profit organisation.'. [ Mr. Iain Wright .]
	 Brought up, read the First time, and added to the Bill.

New Clause 1
	  
	Consultation principles

'(1) The Secretary of State shall, by regulations made by statutory instrument, set out a code of practice to govern local authority consultations with tenants concerning
	(a) a change of landlord, or
	(b) a major change in the management of their homes.
	(2) Regulations made under subsection (1) shall require the local authority to
	(a) place in the public domain all relevant information as is necessary for them to influence or control the management of their accommodation and environment including the resources available to the authority to spend on its stock, stock conditions surveys, the business plan of the proposed landlord, the transfer valuation, details of any land and property to be disposed of, and any other information on which the Offer Document and transfer proposal is based,
	(b) ensure at the start of the consultation that all tenants are aware of their rights to access information as set out under paragraph (a),
	(c) ensure that material it produces is objective, balanced, informative and accurate,
	(d) provide the same level of resources for any tenant group who serves written notice on the authority opposing a proposal as that given to any tenant group making such a proposal so that they can put an alternative view to tenants,
	(e) not deny any reasonable request from any group under paragraph (d) for lists of addresses and access to notice boards, meeting facilities and other relevant resources to enable all parties to communicate with those entitled to vote,
	(f) give two months notice of
	(i) the start and end date of the ballot, and
	(ii) how those eligible will be able to vote, and
	(g) ensure that information regarding who has voted at any point in time is treated in confidence,
	(h) not exceed spending limits for these consultations as may be determined by the Secretary of State and certified as proper by the District Auditor.'. [Simon Hughes.]
	 Brought up, and read the First time.
	 Question put, That the clause be read a Second time:
	 The House divided: Ayes 210, Noes 263.

Question accordingly negatived.

New Clause 8
	  
	Subsidy arrangements: formula and exclusions

'(1) In section 80 of the Local Government and Housing Act 1989 (c. 42) (calculation of Housing Revenue Account subsidy) after subsection (3) insert
	(3A) In determining a formula for the purposes of this section for any year, the Secretary of State shall take into account
	(a) the resources required properly to manage, maintain and repair houses and other properties within their respective Housing Revenue Accounts,
	(b) research into these matters, and
	(c) the resources required to enable respective authorities to acquire, rehabilitate and build new housing to be held within their Housing Revenue Accounts that contributes to meeting the need for affordable housing within their respective areas.'. [Mr. Austin Mitchell.]
	 Brought up, and read the First time.
	 Question put, That the clause be read a Second time:
	 The House divided: Ayes 74, Noes 259.

Question accordingly negatived.

New Clause 32
	  
	Definition of 'community land trust'

'Community land trust means a non-profit organisation which is an industrial and provident society, a company limited by guarantee or other incorporated body whose governing instrument contains provisions to the following effect
	(a) the primary purpose of the organisation is to hold land and other assets in order to promote the social, economic and environmental sustainability of a specified local geographic community by providing or facilitating the provision of affordable or other sub-market housing or other community-based facilities and services,
	(b) the organisation will not dispose of its land and other assets save in the furtherance of its objectives as set out in paragraph (a),
	(c) the membership of the organisation is open to organisations which are located in or persons whose principal place of residence, work or business is located in the specified community the organisation is established to serve (although the organisation may have different classes of membership),
	(d) over 50 per cent. of the governing body is elected by the members of the organisation,
	(e) the organisation is accountable to the local community through annual reporting or otherwise, and is responsive to the local community's needs and to representations made on its behalf, and
	(f) it is an organisation established to help enable the community and those who live or work there to benefit from the land or other assets it holds.'. [Grant Shapps.]
	 Brought up, and read the First time.
	 Question put, That the clause be read a Second time:
	 The House divided: Ayes 186, Noes 278.

Question accordingly negatived.

Clause 2
	  
	Objects

Amendments made: No. 16, in page 2, line 2 leave out 'and'.
	No. 17, line 4, at end insert 'and
	(d) to contribute to the achievement of sustainable development in England,'. [Liz Blackman.]

Clause 4
	  
	Powers: general

Amendment made: No. 18, in page 2, line 39, after 'HCA', insert
	'(whether contained in this Part or elsewhere)'. [Liz Blackman.]

Clause 19
	  
	Power to enter and survey land

Amendments made: No. 19, in page 9, line 31, after 'time', insert 'and subject as follows'.
	No. 20, line 39, leave out 'any occupied' and insert 'the'.
	No. 21, line 40, leave out 'the occupier' and insert
	'every owner or occupier of the land'.
	No. 22, in page 9, line 41, at end insert
	'(2A) A notice under subsection (2)(b) must
	(a) state the purpose for which entry is required, and
	(b) inform the person to whom it is given of the person's rights under this section and, if applicable, section 20.'.
	No. 23, in page 10, line 9, at end insert
	'(6A) In subsection (2)(b) owner has the same meaning as in the Acquisition of Land Act 1981 (c. 67).'. [Liz Blackman.]

Clause 20
	  
	Section 19: supplementary

Amendment made: No. 24, in page 10, line 19, leave out 'any' and insert 'the'. [Liz Blackman.]

Clause 22
	  
	Financial assistance

Amendment made: No. 60, in page 12, line 7, leave out '38' and insert
	'(Duty to give financial assistance in respect of certain disposals)'. [Liz Blackman.]

Clause 34
	  
	Sustainable development

Amendment made: No. 25, in page 15, line 15, leave out Clause 34. [Liz Blackman.]

Clause 36
	  
	Recovery etc. of social housing assistance

Amendments made: No. 135, in page 16, line 25, leave out 'the social housing assistance' and insert
	'any social housing assistance given by way of grant'.
	No. 136, line 28, at end insert
	'(4A) The HCA may not specify an amount which exceeds the recoverable amount.
	(4B) The recoverable amount is
	(a) the total amount of grant received by the person to whom the direction is given, less
	(b) the total of any amounts applied, appropriated or paid in accordance with any previous directions given to the person under subsection (4),
	and for the purposes of paragraph (b) any interest provided for by virtue of section 37(1) is to be ignored.
	(4C) Subsection (4A) is without prejudice to the power of the HCA under section 37(1).'. [Liz Blackman.]

Clause 53
	  
	Property etc. transfers to the HCA and the Welsh Ministers

Amendment made: No. 29, in page 23, line 7, at end insert
	'(5) Schedule [Transfer schemes: tax] makes provision about the tax implications of schemes under this section (and schemes under section 67).'. [Liz Blackman.]

Clause 55
	  
	Interim arrangements

Amendment made: No. 26, in page 23, line 43 , leave out 'and other facilities' and insert ', facilities or other assistance'. [Liz Blackman.]

Clause 66
	  
	Dissolution of Housing Corporation

Amendment made: No. 6, in page 32, line 2 , at end insert
	'(3) Omit section 33A of the Housing Associations Act 1985 (c. 69) (provision of services between the Corporations).'. [Liz Blackman.]

Clause 67
	  
	Transfer schemes

Amendment made: No. 30, in page 32, line 16, at end insert
	'(5) Schedule [Transfer schemes: tax] makes provision about the tax implications of schemes under this section (and schemes under section 53).'. [Liz Blackman.]

Clause 71
	  
	low cost home ownership

Amendment made: No. 61, in page 33, line 12 , leave out 'for rental'. [Liz Blackman.]

Clause 73
	  
	Regulations

Amendments made: No. 62, in page 33, line 43 , leave out first 'accommodation' and insert 'property'.
	No. 63, line 43, leave out second 'accommodation' and insert 'property'.
	No. 64, in page 34, line 1, leave out 'accommodation' and insert 'property'.
	No. 65, line 3, leave out 'accommodation' and insert 'property'. [Liz Blackman.]

Clause 88
	  
	fundamental objectives

Amendment made: No. 66, in page 39, line 16, at end insert
	'(including by promoting the availability of financial services to registered providers of social housing)'. [Liz Blackman.]

Clause 117
	  
	Fees

Amendment made: No. 67, in page 48, line 14 , after 'principles', insert
	'(a) shall provide for section 97(3) to be disregarded for the purpose of subsection (5)(a), and
	(b) .'. [Liz Blackman.]

Clause 127
	  
	Directions

Amendments made: No. 68, in page 51, line 29, leave out 'non-profit'.
	No. 69, line 30, at end insert
	'(1A) A direction may be given to a profit-making registered provider only in so far as its accounts relate to social housing activities.'. [Liz Blackman.]

Clause 128
	  
	Submissions to regulator

Amendment made: No. 70, in page 52, line 14, leave out 'non-profit'. [Liz Blackman.]

Clause 129
	  
	Non-audited industrial and provident society

Amendment made: No. 71, in page 52, line 25, leave out 'non-profit'. [Liz Blackman.]

Clause 136
	  
	Offences

Amendments made: No. 72, in page 55, line 25, at end insert
	'(d) section [companies exempt from audit].'.
	No. 73, line 28, at end insert
	'(c) section [exempt companies: extraordinary audit].'. [Liz Blackman.]

Clause 138
	  
	Disclosure

Amendments made: No. 74, in page 56, line 9, leave out 'non-profit'.
	No. 75, line 10, leave out 'non-profit'. [Liz Blackman.]

Clause 139
	  
	Non-pofit providers only

Amendment made: No. 76, in page 56, line 20, leave out Clause 139. [Liz Blackman.]

Clause 141
	  
	Moratorium

Amendments made: No. 77, in page 57, line 27, leave out 'making of an order' and insert 'presenting of a petition'
	No. 78, line 30, at end insert
	
		
			 'But not the presenting of a petition by the directors or other governing body of the registered provider'.  
		
	
	No. 79, line 34, at end insert
	
		
			 'A decision by the directors or other governing body of a registered provider to present a petition for winding up where the registered provider is (a) a registered company, or (b) an industrial and provident society.[ Liz Blackman.] The directors or governing body'.

Clause 142
	  
	duration of moratorium

Amendments made: No. 80, in page 58, line 1, after '28', insert 'working'.
	No. 81, line 6, after 'provider', insert
	'whom the regulator is able to locate after making reasonable enquiries'.
	No. 82, line 19, leave out paragraph (b) and insert
	'(b) such of its secured creditors as the regulator is able to locate after making reasonable enquiries.'. [Liz Blackman.]

Clause 143
	  
	Further moratorium

Amendment made: No. 83, in page 58, line 32, after 'provider', insert
	'whom the regulator is able to locate after making reasonable enquiries'. [Liz Blackman.]

Clause 144
	  
	Effect of moratorium

Amendment made: No. 84, in page 59, line 1, at end insert
	'(A1) During a moratorium the HCA
	(a) may not give the registered provider a direction under section 36(4), and
	(b) may not take steps to enforce such a direction against the registered provider.'. [Liz Blackman.]

Clause 145
	  
	Exempted disposals

Amendments made: No. 85, in page 59, line 30, after 'by', insert '
	(a) section [right to acquire], or
	(b) '.
	No. 86, line 31, after 'housing', insert 'in Wales'. [Liz Blackman.]

Clause 147
	  
	Proposals procedure

Amendments made: No. 87, in page 60, line 23, leave out 'its secured creditors' and insert
	'such of its secured creditors as the regulator is able to locate after making reasonable enquiries'.
	No. 88, line 31, leave out 'of a registered provider agrees to' and insert
	'to whom proposals were sent agrees to the'.
	No. 89, line 34, after 'creditor', insert 'to whom the proposals were sent'.
	No. 90, line 38, after 'creditors', insert
	'to whom the original proposals were sent'.
	No. 91, in page 61, line 6, after 'creditors', insert
	'to whom the original proposals were sent'. [Liz Blackman.]

Clause 151
	  
	Manager of industrial and provident society: extra powers

Amendments made: No. 92, in page 62, line 33, after 'society', insert '
	(a) an instrument providing for the amalgamation of the society with another industrial and provident society, or
	(b) .'.
	No. 93, line 33, at end insert
	'(2A) An instrument providing for the amalgamation of a society (S1) with another has the same effect as a resolution by S1 under section 50 of the Industrial and Provident Societies Act 1965 (c. 12) (amalgamation of societies by special resolution).'.
	No. 94, line 38, leave out from 'Authority' to end of line 39 and insert
	'(4A) An instrument does not take effect until the copy is registered.'. [Liz Blackman.]

Clause 167
	  
	Exceptions

Amendments made: No. 95, in page 68, line 2, after 'under', insert '
	(a) section [right to acquire], or
	(b) '.
	No. 96, line 2, leave out '(as applied by section 172)' and insert
	'(tenant's right to acquire social housing in Wales)'. [Liz Blackman.]

Clause 170
	  
	Separate accounting

Amendment made: No. 97, in page 68, line 37, at end insert
	'(za) net proceeds of sale to a tenant in pursuance of the right to acquire conferred by section [right to acquire],'. [Liz Blackman.]

Clause 172
	  
	Application of Housing Act 1996

Amendments made: No. 98, in page 69, line 35, leave out 'shall continue to have effect in relation to social housing in England' and insert
	'apply in relation to disposals of social housing by registered providers'.
	No. 99, line 36, leave out 'in subsection (3)' and insert 'below'.
	No. 100, line 41, at end insert 'and'.
	No. 101, line 42, leave out from '(supplemental)' to end of line 43.
	No. 102, in page 70, line 1, leave out subsection (3) and insert
	'(3) In those provisions
	(a) references to a registered social landlord shall be treated as references to a registered provider,
	(b) references to consent given by the Welsh Ministers under section 9 of the 1996 Act shall be treated as references to consent given by the regulator under section 166 of this Act,
	(c) references to the Welsh Ministers in connection with a power to make orders or regulations shall be treated as references to the Secretary of State,
	(d) in section 12(5)(b) of the 1996 Act the reference to the Welsh Ministers shall be treated as a reference to the HCA, and
	(e) references to a resolution of the National Assembly for Wales shall be treated as references to a resolution of either House of Parliament.
	(4) This section does not affect the continued application of the provisions listed in subsection (2) in relation to disposals made before this section comes into force.'. [Liz Blackman.]

Clause 177
	  
	consent to disposals under other legislation

Amendments made: No. 103, in page 70, line 30, leave out 'and'.
	No. 104, line 33, at end insert ', and
	(c) section 173 of the Local Government and Housing Act 1989 (c. 42) (consent to certain disposals of housing obtained from new town corporations).'. [Liz Blackman.]

Clause 178
	  
	Section 177: consequential amendments

Amendment made: No. 105, in page 72, line 4, at end insert
	'(4) In section 173 of the Local Government and Housing Act 1989 (c. 42) (consent to certain disposals of housing obtained from new town corporations)
	(a) in subsection (1)(a) (consent) for Secretary of State substitute appropriate authority,
	(b) after subsection (1) insert
	(1A) In this section the appropriate authority means
	(a) in relation to a disposal of land in England by a registered provider of social housing, the Regulator of Social Housing,
	(b) in relation to any other disposal of land in England, the Secretary of State, and
	(c) in relation to a disposal of land in Wales, the Welsh Ministers.,
	(c) in subsection (5) (consultation of tenants) for Secretary of State substitute appropriate authority,
	(d) in subsection (5)(a) for himself substitute itself, and
	(e) omit subsection (6) (consultation of Housing Corporation).'. [Liz Blackman.]

Clause 180
	  
	Provision of social housing

Amendments made: No. 106, in page 72, leave out line 21.
	No. 107, line 26, leave out paragraphs (a) and (b).
	No. 108, line 42, at end insert
	'(3) In setting standards the regulator shall have regard to the desirability of registered providers being free to choose how to provide services and conduct business.'. [Liz Blackman.]

Clause 181
	  
	management

Amendment made: No. 109, in page 73, line 6, at end insert
	'(3) In setting standards the regulator shall have regard to the desirability of registered providers being free to choose how to provide services and conduct business.'. [Liz Blackman.]

Clause 183
	  
	consultation

Amendment made: No. 110, in page 73, line 27, at end insert
	'(2) Before setting a standard which would apply to charities, or issuing, revising or withdrawing a code of practice which applies or would apply to charities, the regulator must consult the Charity Commission.'. [Liz Blackman.]

Clause 184
	  
	Direction by the Secretary of State

Amendments made: No. 111, in page 73, line 30, leave out 'or'.
	No. 112, line 31, at end insert ', or
	(c) to have regard to specified objectives when setting standards under section 180 or 181.'.
	No. 113, line 31, at end insert
	'(1A) The Secretary of State may give a direction under subsection (1)(a) or (b) only if it relates, in the Secretary of State's opinion, to
	(a) quality of accommodation,
	(b) rent, or
	(c) involvement by tenants in the management by registered providers of accommodation.'.
	No. 114, line 40, at end insert
	'(3A) Before giving a direction about a standard which would apply to charities the Secretary of State must consult the Charity Commission.'. [Liz Blackman.]

Clause 198
	  
	Industrial and provident society: change of rules

Amendments made: No. 115, in page 78, line 23, leave out subsections (2) and (3) and insert
	'(2) An amendment of the society's rules requires consent if it
	(a) alters the society's objects,
	(b) makes provision about the distribution of assets to members, or
	(c) enables the society to become, or cease to be, a subsidiary or associate of another body.
	(3) An amendment of the rules which requires consent is effective only if the regulator has first consented.
	(3A) The regulator may not consent to an amendment which it thinks would turn the society into a profit-making organisation.
	(3B) The society must notify the regulator of an amendment of the rules which does not require consent.'.
	No. 116, line 28, at beginning insert
	'In relation to an amendment which requires consent'.
	No. 117, line 31, at beginning insert 'The preceding provisions of'.
	No. 118, line 31, leave out 'it' and insert 'they'.
	No. 119, line 31, at end insert
	'(6) The Secretary of State may by order amend the list in subsection (2).'.  [Liz Blackman.]

Clause 200
	  
	Companies: change of articles

Amendments made: No. 120, in page 79, line 3, leave out subsections (2) and (3) and insert
	'(2) An amendment of the company's articles of association requires consent if it
	(a) alters the company's objects,
	(b) makes provision about the distribution of assets to members, or
	(c) enables the company to become, or cease to be, a subsidiary or associate of another body.
	(3) An amendment of the articles of association which requires consent is effective only if the regulator has first consented.
	(3A) The company must notify the regulator of an amendment of the articles of association which does not require consent.'.
	No. 121, line 9, at end insert
	'(4A) The company must notify the regulator
	(a) of an amendment of the articles of association which does not require consent, or
	(b) of a change to its name or registered office.'.
	No. 122, line 10, at beginning insert
	'In relation to an amendment which requires consent'.
	No. 123, line 12, at end insert
	'(6) The Secretary of State may by order amend the list in subsection (2).'.  [Liz Blackman.]

Clause 205
	  
	Grounds for giving notice

Amendment made: No. 124, in page 80, line 31, at end insert
	'(10A) Case 10 is where the registered provider has failed to comply with an order made by an ombudsman appointed by virtue of section 124.'. [Liz Blackman.]

Clause 240
	  
	transfer of land

Amendment made: No. 125, in page 92, line 40, after 'specified', insert 'non-profit'. [Liz Blackman.]

Clause 255
	  
	Appointment of new officers

Amendment made: No. 126, in page 98, line 8, at end insert
	'(2A) The regulator may appoint more than a minority of the officers of a registered provider only if
	(a) the provider has fewer officers than required by its constitution, or
	(b) its constitution does not specify a minimum number of officers.'. [Liz Blackman.]

Clause 261
	  
	General

Amendment made: No. 127, in page 101, line 32, at end insert
	'working day means a day other than
	(g) a Saturday or Sunday,(h) Christmas Day or Good Friday, or(i) a day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971 (c. 80).'. [Liz Blackman.]

Clause 262
	  
	Index of defined terms

Amendment made: No. 128, in page 103, line 14, at end insert
	
		
			 'Working day Section 261'. 
		
	
	  [Liz Blackman.]

Clause 282
	  
	Requirements to co-operate in relation to certain disposals of land

Amendment made: No. 31, in page 115, line 9, at end insert
	'(5A) Any regulations which provide for the appropriate person to approve a proposal for a local housing authority to dispose of land must ensure that the authority has the opportunity to make representations to the appropriate person before the appropriate person decides whether or not to approve the proposal.'. [Liz Blackman.]

Clause 286
	  
	Shared ownership leases: protection for certain limited equity leases

Amendment made: No. 32, in page 120, line 36, leave out Clause 286. [Liz Blackman.]

Clause 287
	  
	Shared ownership leases: protection for hard to replace houses

Amendments made: No. 33, in page 121, line 6, after '3', insert 'or 3A'.
	No. 34, in page 121, line 8, leave out 'sub-paragraph (2) of that paragraph' and insert 'sub-paragraph (1A);
	(aa) any provision in the lease for the tenant to acquire the landlord's interest provides for the tenant to acquire the interest on terms specified in the lease and complying with such requirements as may be prescribed;
	(ab) the lease meets any other prescribed conditions;
	(ac) the lease does not fall within any prescribed exemptions'.
	No. 35, line 10, at end insert
	'(1A) The conditions referred to in sub-paragraph (1)(a) are that the lease
	(a) was granted for a term of 99 years or more and is not (and cannot become) terminable except in pursuance of a provision for re-entry or forfeiture;
	(b) was granted at a premium, calculated by reference to the value of the house or the cost of providing it, of not less than 25 per cent, or such other percentage as may be prescribed, of the figure by reference to which it was calculated;
	(c) provides for the tenant to acquire additional shares in the house on terms specified in the lease and complying with such requirements as may be prescribed;
	(d) does not restrict the tenant's powers to mortgage or charge his interest in the house;
	(e) if it enables the landlord to require payment for outstanding shares in the house, does so only in such circumstances as may be prescribed; and
	(f) states the landlord's opinion that by virtue of this paragraph the lease is excluded from the operation of this Part of this Act.'.
	No. 36, line 24, leave out 'paragraph 3(2)' and insert 'sub-paragraph (1A)'.
	No. 37, line 25, leave out 'paragraph 3(2)(g)' and insert 'paragraph (f) of that sub-paragraph'.
	No. 38, leave out lines 30 to 32.
	No. 39, line 41, at end insert
	'(2) In paragraph 5 of that Schedule to that Act (power to prescribe matters by regulations)
	(a) in sub-paragraph (1) for Secretary of State substitute appropriate national authority, and
	(b) in sub-paragraph (2)
	(i) in paragraph (b) for Secretary of State substitute appropriate national authority,
	(ii) after which insert , in the case of regulations made by the Secretary of State, and
	(iii) after Parliament insert and, in the case of regulations made by the Welsh Ministers, shall be subject to annulment in pursuance of a resolution of the National Assembly for Wales.
	(3) After paragraph 6 of that Schedule to that Act (interpretation) insert
	7 In this Schedule appropriate national authority means
	(a) in relation to England, the Secretary of State; and
	(b) in relation to Wales, the Welsh Ministers.'. [Liz Blackman.]

Clause 290
	  
	Review of determintion of value

Amendments made: No. 40, in page 122, line 25, at end insert
	'(2A) A request under subsection (2)(b) must
	(a) be in writing;
	(b) state the reason it is being made; and
	(c) confirm that the landlord has not made to the tenant a grant of the kind mentioned in section 138(1) in respect of the claim by the tenant to exercise the right to buy in respect of the dwelling-house.'.
	No. 41, line 26, leave out 'such a request' and insert 'a request under subsection (2)(b)'.
	No. 42, line 38, at end insert
	'(5A) A review notice may not be served if the landlord has made a grant of the kind mentioned in subsection (2A)(c).
	(5B) A person who makes a request under subsection (2)(b) must inform the district valuer if a grant of the kind mentioned in subsection (2A)(c) is made during the period of 14 days mentioned in subsection (4).
	(5C) Subsection (5D) applies if the district valuer is considering whether to serve a review notice on the valuer's own initiative.
	(5D) The landlord or the tenant must, if requested by the district valuer, inform the valuer whether a grant of the kind mentioned in subsection (2A)(c) has been made.'.
	No. 43, in page 124, line 14, at end insert
	'(3A) After section 128(5) (notice of determination or redetermination) insert
	(5A) The landlord shall, as soon as practicable, serve a copy of the notice on the district valuer if
	(a) the district valuer requests it; or
	(b) the landlord requests a review of the determination or redetermination under section 128A(2)(b).
	(5B) The tenant shall, as soon as practicable, serve a copy of the notice on the district valuer if the tenant requests a review of the determination or redetermination under section 128A(2)(b).
	(5C) For the purposes of subsections (5A) and (5B) it does not matter whether the request in question was made before, on or after the service of the notice in accordance with subsection (5).'. [Liz Blackman.]

Clause 303
	  
	Orders and regulations

Amendments made: No. 44, in page 131, line 37, at end insert
	'( ) an order of the Secretary of State under paragraph 19(4) or 21(2) or (4) of Schedule (Possession orders relating to certain tenancies),'.
	No. 45, in page 132, line 5, at end insert
	'( ) an order of the Secretary of State under paragraph 16(7), 18(4), 22(2) or 23(2) of Schedule (Possession orders relating to certain tenancies),'.
	No. 46, line 13, leave out from 'containing' to 'may' in line 14 and insert '
	( ) an order of the Welsh Ministers under section 304,
	( ) an order of the Welsh Ministers under paragraph 19(4) or 21(2) or (4) of Schedule (Possession orders relating to certain tenancies), or
	( ) regulations of the Welsh Ministers under section 266(3) or 277,'.
	No. 47, in page 132, line 17, leave out from 'containing' to 'is' in line 19 and insert '
	(a) an order of the Welsh Ministers under paragraph 16(7), 18(4), 22(2) or 23(2) of Schedule (Possession orders relating to certain tenancies),
	(b) regulations of the Welsh Ministers under Chapter 1 of Part 3 (including Schedule 8 but excluding section 266(3) or 277), or
	(c) regulations of the Welsh Ministers under section 284,'. [Liz Blackman.]

Clause 308
	  
	Commencement

Amendments made: No. 48, in page 133, line 31, leave out '287' and insert
	'(Service charges: provision of information and designated accounts)'.
	No. 49, line 31, after '301', insert
	'and Schedule (Service charges: provision of information and designated accounts)'.
	No. 50, in page 134, line 5, after 'Schedule 5', insert
	'or section (Possession orders relating to certain tenancies) and Schedule (Possession orders relating to certain tenancies)'. [Liz Blackman.]

New Schedule 1
	  
	Transfer Schemes: Tax

Overview
	1 This Schedule makes provision about the fiscal effect of transfers under schemes made under sections 53 and 67.
	 Key concepts
	2 (1) In this Schedule
	(a) transfer scheme means a scheme under section 53 or 67, and
	(b) transfer means a transfer under a transfer scheme.
	(2) In this Schedule transfer between bodies means a transfer
	(a) from the Urban Regeneration Agency, the Commission for the New Towns or the Housing Corporation, and
	(b) to the HCA or the Regulator of Social Housing.
	(3) In this Schedule transfer to government means a transfer to
	(a) a Minister of the Crown, or
	(b) the Welsh Ministers.
	 Other definitions
	3 (1) In this Schedule
	(a) ICTA means the Income and Corporation Taxes Act 1988 (c. 1),
	(b) TCGA means the Taxation of Chargeable Gains Act 1992 (c. 12),
	(c) FA 1996 means the Finance Act 1996 (c. 8),
	(d) FA 2002 means the Finance Act 2002 (c. 23), and
	(e) HMRC means the Commissioners for Her Majesty's Revenue and Customs.
	(2) In this Schedule a reference to a trade includes a reference to part of a trade.
	 Corporation tax: continuity of trade
	4 (1) This paragraph applies if as the result of a transfer scheme
	(a) a transferor ceases a trade, and
	(b) a transferee commences it.
	(2) In connection with the computation of profits and losses for the purpose of corporation tax in respect of periods wholly or partly after the commencement of the transfer scheme
	(a) the transferee shall be treated as having always carried on the trade, and
	(b) the trade shall be considered separately from any other trade of the transferee (with any necessary apportionment being made).
	 Corporation tax: capital allowances
	5 (1) This paragraph applies in respect of property transferred under a transfer scheme from
	(a) the Urban Regeneration Agency, or
	(b) the Commission for the New Towns.
	(2) Where the property was used by the transferor, and is to be used by the transferee, in connection with a trade, section 343(2) of ICTA (company reconstructions: capital allowances) shall apply.
	6 The following transfers shall be treated as giving rise to neither allowance nor charge for the purposes of capital allowances in respect of a trade (and allowances shall be calculated as if the transferee had always carried on the trade)
	(a) a transfer from the Housing Corporation, and
	(b) a transfer to government.
	 Corporation tax: capital gains
	7 (1) This paragraph applies in respect of property transferred under a transfer scheme from
	(a) the Urban Regeneration Agency,
	(b) the Commission for the New Towns, or
	(c) the Housing Corporation.
	(2) Section 17 of TCGA (disposals and acquisitions treated as at market value) shall not apply.
	(3) For the purposes of TCGA the transfer (in relation to the transferor and the transferee) is to be taken as being a disposal for a consideration such that neither gain nor loss accrues.
	8 A transfer shall be disregarded for the purposes of section 30 of TCGA (value-shifting: tax-free benefits).
	9 At the end of section 35(3)(d) of TCGA (re-basing to 1982) add
	(xviii) Schedule [Transfer schemes: tax] to the Housing and Regeneration Act 2008.
	 Corporation tax: intangible assets
	10 (1) This paragraph applies for the purposes of Schedule 29 to FA 2002 (intangible assets).
	(2) Expressions used in this paragraph have the same meaning as in that Schedule.
	(3) A transfer between bodies of a chargeable intangible asset is a tax-neutral transfer.
	(4) An intangible fixed asset which is an existing asset of the transferor at the time of a transfer between bodies is to be treated, on and after the transfer, as an existing asset of the transferee.
	(5) A transfer to government of a chargeable intangible asset is to be treated as not involving a realisation of the asset by the transferor.
	 Corporation tax: loan relationships
	11 (1) If as a result of a transfer the transferee replaces the transferor as a party to a loan relationship, paragraph 12(2) of Schedule 9 to FA 1996 (transfer within group: continuity of treatment) shall apply (whether or not the transferor and transferee are bodies corporate).
	(2) Expressions used in this paragraph have the same meaning as in that Schedule.
	 Stamp duty
	12 (1) Stamp duty shall not be chargeable on a transfer scheme.
	(2) Stamp duty shall not be chargeable on a document certified by HMRC as connected with a transfer scheme.
	(3) A document which is not chargeable by virtue of this paragraph must be stamped in accordance with section 12 of the Stamp Act 1891 (c. 39) with a stamp denoting that it is not chargeable.'. [Liz Blackman.]
	 Brought up, read the First time, and added to the Bill.

New Schedule 2
	  
	Possession orders relating to certain tenancies
	  
	Part 1
	  
	Amendments to the Housing Acts of 1985, 1988 and 1996

Housing Act 1985 (c. 68)
	1 The Housing Act 1985 is amended as follows.
	2 (1) Section 82 (security of tenure: date on which secure tenancy comes to an end as a result of a possession order etc.) is amended as follows.
	(2) In subsection (1) for by obtaining an order substitute as.
	(3) For subsections (1A) and (2) substitute
	(1A) The tenancy may be brought to an end by the landlord
	(a) obtaining
	(i) an order of the court for the possession of the dwelling-house, and
	(ii) the execution of the order,
	(b) obtaining an order under subsection (3), or
	(c) obtaining a demotion order under section 82A.
	(2) In the case mentioned in subsection (1A)(a), the tenancy ends when the order is executed.
	3 (1) Section 85 (extended discretion of court in certain proceedings for possession) is amended as follows.
	(2) In subsection (3)(a) omit the words from or payments to profits),.
	(3) For subsection (4) substitute
	(4) The court may discharge or rescind the order for possession if it thinks it appropriate to do so having had regard to
	(a) any conditions imposed under subsection (3), and
	(b) the conduct of the tenant in connection with those conditions.
	4 In Schedule 3 (grounds for withholding consent to assignment by way of exchange) for Ground 1 substitute
	Ground 1
	The tenant or the proposed assignee is subject to an order of the court for the possession of the dwelling-house of which he is the secure tenant.
	 Housing Act 1988 (c. 50)
	5 The Housing Act 1988 is amended as follows.
	6 (1) Section 5 (security of tenure) is amended as follows.
	(2) For subsection (1) substitute
	(1) An assured tenancy cannot be brought to an end by the landlord except by
	(a) obtaining
	(i) an order of the court for possession of the dwelling-house under section 7 or 21, and
	(ii) the execution of the order,
	(b) obtaining an order of the court under section 6A (demotion order), or
	(c) in the case of a fixed term tenancy which contains power for the landlord to determine the tenancy in certain circumstances, by the exercise of that power,
	and, accordingly, the service by the landlord of a notice to quit is of no effect in relation to a periodic assured tenancy.
	(1A) Where an order of the court for possession of the dwelling-house is obtained, the tenancy ends when the order is executed.
	(3) In subsection (2)(a) after court insert of the kind mentioned in subsection (1)(a) or (b) or any other order of the court.
	7 In section 7(7) (possession orders in cases of fixed term tenancies which have come to an end) for on the day on which the order takes effect substitute in accordance with section 5(1A).
	8 (1) Section 9 (extended discretion of court in possession claims) is amended as follows.
	(2) In subsection (3) omit the words from or payments to profits).
	(3) For subsection (4) substitute
	(4) The court may discharge or rescind any such order as is referred to in subsection (2) if it thinks it appropriate to do so having had regard to
	(a) any conditions imposed under subsection (3), and
	(b) the conduct of the tenant in connection with those conditions.
	9 (1) Section 21 (recovery of possession on expiry or termination of assured shorthold tenancies) is amended as follows.
	(2) In subsection (3) for on the day on which the order takes effect substitute in accordance with section 5(1A).
	(3) After subsection (4) insert
	(4A) Where a court makes an order for possession of a dwelling-house by virtue of subsection (4) above, the assured shorthold tenancy shall end in accordance with section 5(1A).
	 Housing Act 1996 (c. 52)
	10 The Housing Act 1996 is amended as follows.
	11 (1) Section 127 (introductory tenancies: proceedings for possession) is amended as follows.
	(2) In subsection (1) for the words from an order to the end substitute 
	(a) an order of the court for the possession of the dwelling-house, and
	(b) the execution of the order.
	(3) After subsection (1) insert
	(1A) In such a case, the tenancy ends when the order is executed.
	(4) In subsection (2) for such an order substitute an order of the kind mentioned in subsection (1)(a).
	(5) Omit subsection (3).
	12 (1) Section 130 (introductory tenancies: effect of beginning proceedings for possession) is amended as follows.
	(2) In subsection (2)(a) for the words from in pursuance of, where they first appear, to of the court) substitute in accordance with section 127(1A).
	(3) In subsection (3)(b) for 127(2) and (3) substitute 127(1A) and (2).
	13 (1) Section 143D (demoted tenancies: proceedings for possession) is amended as follows.
	(2) In subsection (1) for the words from an order to the end substitute 
	(a) an order of the court for the possession of the dwelling-house, and
	(b) the execution of the order.
	(3) After subsection (1) insert
	(1A) In such a case, the tenancy ends when the order is executed.
	(4) Omit subsection (3).
	 Transitional provisions
	14 (1) Subject as follows, this Part of this Schedule does not apply to any possession order made before the commencement date.
	(2) This Part of this Schedule does apply to a possession order made before the commencement date if the order applies to
	(a) a new tenancy by virtue of paragraph 20, or
	(b) a tenancy which has not ended pursuant to the order before that date.
	(3) Paragraphs 3(3) and 8(3) apply to any possession order regardless of when it was made.
	(4) In determining for the purposes of sub-paragraph (2) whether a tenancy has ended, any ending which was temporary because the tenancy was restored in consequence of a court order is to be ignored.
	(5) In this paragraph the commencement date means the day on which section (Possession orders relating to certain tenancies) comes into force.

Part 2
	  
	Replacement of certain terminated tenancies

Circumstances in which replacement tenancies arise
	15 In this Part of this Schedule an original tenancy means any secure tenancy, assured tenancy, introductory tenancy or demoted tenancy
	(a) in respect of which a possession order was made before the commencement date, and
	(b) which ended before that date pursuant to the order but not on the execution of the order.
	16 (1) A new tenancy of the dwelling-house which was let under the original tenancy is treated as arising on the commencement date between the ex-landlord and the ex-tenant if
	(a) on that date
	(i) the home condition is met, and
	(ii) the ex-landlord is entitled to let the dwelling-house, and
	(b) the ex-landlord and the ex-tenant have not entered into another tenancy after the date on which the original tenancy ended but before the commencement date.
	(2) The home condition is that the dwelling-house which was let under the original tenancy
	(a) is, on the commencement date, the only or principal home of the ex-tenant, and
	(b) has been the only or principal home of the ex-tenant throughout the termination period.
	(3) In this Part of this Schedule the termination period means the period
	(a) beginning with the end of the original tenancy, and
	(b) ending with the commencement date.
	(4) For the purposes of sub-paragraph (2)(a) the dwelling-house is the only or principal home of the ex-tenant on the commencement date even though the ex-tenant is then absent from the dwelling-house as a result of having been evicted in pursuance of a warrant if the warrant is subsequently set aside but the possession order under which it was granted remains in force.
	(5) In that case, the new tenancy is treated as arising on the first day (if any) on which the ex-tenant resumes occupation of the dwelling-house as that person's only or principal home.
	(6) For the purposes of sub-paragraph (2)(b) any period of time within the termination period is to be ignored if
	(a) it is a period in which the ex-tenant was absent from the dwelling-house as a result of having been evicted in pursuance of a warrant which was then set aside although the possession order under which it was granted remained in force, and
	(b) the ex-tenant subsequently resumes occupation of the dwelling-house as the ex-tenant's only or principal home.
	(7) The appropriate national authority may by order provide for particular cases or descriptions of case, or particular circumstances, where the home condition is met where it would not otherwise be met.
	 Nature of replacement tenancies
	17 The new tenancy is to be
	(a) a secure tenancy if
	(i) the original tenancy was a secure tenancy, or
	(ii) the original tenancy was an introductory tenancy but no election by the ex-landlord under section 124 of the Housing Act 1996 (c. 52) is in force on the day on which the new tenancy arises,
	(b) an assured shorthold tenancy if the original tenancy was an assured shorthold tenancy,
	(c) an assured tenancy which is not an assured shorthold tenancy if the original tenancy was a tenancy of that kind,
	(d) an introductory tenancy if the original tenancy was an introductory tenancy and an election by the ex-landlord under section 124 of the Housing Act 1996 (c. 52) is in force on the day on which the new tenancy arises,
	(e) a demoted tenancy to which section 20B of the Housing Act 1988 (c. 50) applies if the original tenancy was a demoted tenancy of that kind, and
	(f) a demoted tenancy to which section 143A of the Housing Act 1996 (c. 52) applies if the original tenancy was a demoted tenancy of that kind.
	18 (1) The new tenancy is, subject as follows, to have effect on the same terms and conditions as those applicable to the original tenancy immediately before it ended.
	(2) The terms and conditions of the new tenancy are to be treated as modified so as to reflect, so far as applicable, any changes made during the termination period to the level of payments for the ex-tenant's occupation of the dwelling-house or to the other terms and conditions of the occupation.
	(3) The terms and conditions of the new tenancy are to be treated as modified so that any outstanding liabilities owed by the ex-tenant to the ex-landlord in respect of payments for the ex-tenant's occupation of the dwelling-house during the termination period are liabilities in respect of rent under the new tenancy.
	(4) The appropriate national authority may by order provide for other modifications of the terms and conditions of the new tenancy.
	(5) Nothing in sub-paragraphs (2) to (4) is to be read as permitting modifications of the new tenancy which would not have been possible if the original tenancy had remained a tenancy throughout the termination period.
	(6) The terms and conditions of a new secure tenancy which arises by virtue of paragraph 17(a)(ii) are to be treated as modified so far as necessary to reflect the fact that the new tenancy is a secure tenancy and not an introductory tenancy.
	19 (1) Any provision which is made by or under an enactment and relates to a secure tenancy, assured tenancy, introductory tenancy or demoted tenancy applies, subject as follows, to a new tenancy of a corresponding kind.
	(2) Any such provision which relates to an introductory tenancy applies to a new tenancy which is an introductory tenancy as if the trial period mentioned in section 125(2) of the Housing Act 1996 (c. 52) were the period of one year beginning with the day on which the new tenancy arises.
	(3) Any such provision which relates to a demoted tenancy applies to a new tenancy which is a demoted tenancy as if the demotion period mentioned in section 20B(2) of the Housing Act 1988 (c. 50) or section 143B(1) of the Housing Act 1996 (c. 52) were the period of one year beginning with the day on which the new tenancy arises.
	(4) The appropriate national authority may by order modify any provision made by or under an enactment in its application to a new tenancy.
	 Status of possession order and other court orders
	20 (1) The possession order in pursuance of which the original tenancy ended is to be treated, so far as practicable, as if it applies to the new tenancy.
	(2) Any court orders made before the commencement date which
	(a) relate to the occupation of the dwelling-house, and
	(b) were made in contemplation of, in consequence of or otherwise in connection with the possession order,
	are to be treated, so far as practicable, as if they apply to the new tenancy.
	 Continuity of tenancies
	21 (1) The new tenancy and the original tenancy are to be treated for the relevant purposes as
	(a) the same tenancy, and
	(b) a tenancy which continued uninterrupted throughout the termination period.
	(2) The relevant purposes are
	(a) determining whether the ex-tenant is a successor in relation to the new tenancy,
	(b) calculating on or after the commencement date the period qualifying, or the aggregate of such periods, under Schedule 4 to the Housing Act 1985 (c. 68) (qualifying period for right to buy and discount),
	(c) determining on or after the commencement date whether the condition set out in paragraph (b) of Ground 8 of Schedule 2 to that Act is met, and
	(d) any other purposes specified by the appropriate national authority by order.
	(3) In proceedings on a relevant claim the court concerned may order that the new tenancy and the original tenancy are to be treated for the purposes of the claim as
	(a) the same tenancy, and
	(b) a tenancy which continued uninterrupted throughout the termination period.
	(4) The following are relevant claims
	(a) a claim by the ex-tenant or the ex-landlord against the other for breach of a term or condition of the original tenancy
	(i) in respect of which proceedings are brought on or after the commencement date, or
	(ii) in respect of which proceedings were brought, but were not finally determined, before that date,
	(b) a claim by the ex-tenant against the ex-landlord for breach of statutory duty in respect of which proceedings are or were brought as mentioned in paragraph (a)(i) or (ii), and
	(c) any other claim of a description specified by the appropriate national authority by order.
	(5) For the purposes of sub-paragraph (4)(a) proceedings must be treated as finally determined if
	(a) they are withdrawn,
	(b) any appeal is abandoned, or
	(c) the time for appealing has expired without an appeal being brought.
	 Compliance with consultation requirements
	22 (1) The fact that
	(a) the views of the ex-tenant during the termination period were not sought or taken into account when they should have been sought or taken into account, or
	(b) the views of the ex-tenant during that period were sought or taken into account when they should not have been sought or taken into account,
	is not to be taken to mean that the consultation requirements were not complied with.
	(2) The consultation requirements are
	(a) the requirements under
	(i) section 105(1) of the Housing Act 1985 (c. 68),
	(ii) paragraphs 3 and 4 of Schedule 3A to that Act,
	(iii) regulations made under section 27AB of that Act which relate to arranging for ballots or polls with respect to a proposal to enter into a management agreement, and
	(iv) section 137(2) of the Housing Act 1996 (c. 52), and
	(b) any other requirements specified by the appropriate national authority by order.
	 Joint tenancies
	23 (1) In the application of this Part of this Schedule in relation to an original tenancy which was a joint tenancy, a reference to the dwelling-house being the only or principal home of the ex-tenant is to be treated as a reference to the dwelling-house being the only or principal home of at least one of the ex-tenants of the joint tenancy.
	(2) The appropriate national authority may by order provide for this Part of this Schedule to apply in relation to an original tenancy which was a joint tenancy subject to such additional modifications as may be specified in the order.
	 Supplementary
	24 In determining for the purposes of this Part of this Schedule whether a tenancy has ended, any ending which was temporary because the tenancy was restored in consequence of a court order is to be ignored.
	25 In this Part of this Schedule
	appropriate national authority means
	(a) in relation to England, the Secretary of State, and(b) in relation to Wales, the Welsh Ministers,
	assured shorthold tenancy and assured tenancy have the same meanings as in Part 1 of the Housing Act 1988 (c. 50) but do not include a demoted tenancy to which section 20B of that Act applies,
	the commencement date means the day on which section (Possession orders relating to certain tenancies) comes into force,
	demoted tenancy means a tenancy to which section 20B of the Act of 1988 or section 143A of the Housing Act 1996 (c. 52) applies,
	dwelling-house
	(a) in relation to an assured tenancy, or a tenancy to which section 20B of the Act of 1988 applies, has the same meaning as in Part 1 of that Act,(b) in relation to a tenancy to which section 143A of the Act of 1996 applies, has the same meaning as in Chapter 1A of Part 5 of that Act,(c) in relation to an introductory tenancy, has the meaning given by section 139 of the Act of 1996, and(d) in relation to a secure tenancy, has the meaning given by section 112 of the Housing Act 1985 (c. 68),
	ex-landlord, means the person who was the landlord under an original tenancy,
	ex-tenant means the person who was the tenant under an original tenancy,
	introductory tenancy has the same meaning as in Chapter 1 of Part 5 of the Act of 1996,
	modification includes omission,
	new tenancy means a tenancy which is treated as arising by virtue of paragraph 16,
	original tenancy has the meaning given by paragraph 15,
	possession order, in relation to a tenancy, means a court order for the possession of the dwelling-house,
	secure tenancy has the same meaning as in Part 4 of the Act of 1985,
	successor
	(a) in relation to a new tenancy which is an assured tenancy, has the same meaning as in section 17 of the Act of 1988,(b) in relation to a new tenancy which is a demoted tenancy to which section 143A of the Act of 1996 applies, has the meaning given by section 143J of that Act,(c) in relation to a new tenancy which is an introductory tenancy, has the same meaning as in section 132 of the Act of 1996, and(d) in relation to a new tenancy which is a secure tenancy, has the same meaning as in section 88 of the Act of 1985.
	termination period has the meaning given by paragraph 16(3).'. [Liz Blackman.]
	 Brought up, read the first time, and added to the Bill.

New Schedule 3
	  
	Service charges: provision of information and designated accounts

Landlord and Tenant Act 1985 (c. 70)
	1 The Landlord and Tenant Act 1985 is amended as follows.
	2 For section 21 (as substituted by section 152 of the Commonhold and Leasehold Reform Act 2002 (c. 15)) (regular statements of account) substitute
	21 Service charge information
	(1) The appropriate national authority may make regulations about the provision, by landlords of dwellings to each tenant by whom service charges are payable, of information about service charges.
	(2) The regulations must, subject to any exceptions provided for in the regulations, require the landlord to provide information about
	(a) the service charges of the tenant,
	(b) any associated service charges, and
	(c) relevant costs relating to service charges falling within paragraph (a) or (b).
	(3) The regulations must, subject to any exceptions provided for in the regulations, require the landlord to provide the tenant with a report by a qualified person on information which the landlord is required to provide by virtue of this section.
	(4) The regulations may make provision about
	(a) information to be provided by virtue of subsection (2),
	(b) other information to be provided (whether in pursuance of a requirement or otherwise),
	(c) reports of the kind mentioned in subsection (3),
	(d) the period or periods in relation to which information or reports are to be provided,
	(e) the times at or by which information or reports are to be provided,
	(f) the form and manner in which information or reports are to be provided (including in particular whether information is to be contained in a statement of account),
	(g) the descriptions of persons who are to be qualified persons for the purposes of subsection (3).
	(5) Subsections (2) to (4) do not limit the scope of the power conferred by subsection (1).
	(6) Regulations under this section may
	(a) make different provision for different cases or descriptions of case or for different purposes,
	(b) contain such supplementary, incidental, consequential, transitional, transitory or saving provision as the appropriate national authority considers appropriate.
	(7) Regulations under this section are to be made by statutory instrument which
	(a) in the case of regulations made by the Secretary of State, is to be subject to annulment in pursuance of a resolution of either House of Parliament, and
	(b) in the case of regulations made by the Welsh Ministers, is to be subject to annulment in pursuance of a resolution of the National Assembly for Wales.
	(8) In this section
	the appropriate national authority
	(a) in relation to England, means the Secretary of State, and(b) in relation to Wales, means the Welsh Ministers,
	associated service charges, in relation to a tenant by whom a contribution to relevant costs is payable as a service charge, means service charges of other tenants so far as relating to the same costs.
	3 (1) Section 21A (withholding of service charges) is amended as follows.
	(2) For subsection (1) substitute
	(1) A tenant may withhold payment of a service charge if
	(a) the landlord has not provided him with information or a report
	(i) at the time at which, or
	(ii) (as the case may be) by the time by which,
	he is required to provide it by virtue of section 21, or
	(b) the form or content of information or a report which the landlord has provided him with by virtue of that section (at any time) does not conform exactly or substantially with the requirements prescribed by regulations under that section.
	(3) In subsection (2)
	(a) in paragraph (a) for accounting period to which the document substitute period to which the information or report, and
	(b) for paragraph (b) substitute
	(b) amounts standing to the tenant's credit in relation to the service charges at the beginning of that period.
	(4) In subsection (3)
	(a) in paragraph (a) for document concerned has been supplied substitute information or report concerned has been provided, and
	(b) for paragraph (b) substitute
	(b) in a case within paragraph (b) of that subsection, after information or a report conforming exactly or substantially with requirements prescribed by regulations under section 21 has been provided to the tenant by the landlord by way of replacement of that previously provided.
	4 (1) Section 22 (as substituted by section 154 of the Commonhold and Leasehold Reform Act 2002 (c. 15)) (inspection etc of documents) is amended as follows.
	(2) In subsection (1)(a) for the words from the matters to under substitute information required to be provided to him by virtue of.
	(3) In subsection (3) for supplied with the statement of account under substitute provided with the information concerned by virtue of.
	(4) In subsection (4)
	(a) for statement of account, wherever it appears, substitute information,
	(b) for supplied, wherever it appears, substitute provided, and
	(c) in paragraph (b) for 21(4) substitute 21.
	5 In section 23(1) (as substituted by paragraph 1 of Schedule 10 to the Commonhold and Leasehold Reform Act 2002 (c. 15) (information held by superior landlord)
	(a) for a statement of account which the landlord is required to supply under substitute information which the landlord is required to provide by virtue of, and
	(b) after of the relevant information insert which relates to those matters.
	6 In section 23A(4) (effect of change of landlord)
	(a) in paragraph (a) after 23 insert and any regulations under section 21, and
	(b) after paragraph (b) insert and
	(c) any regulations under section 21 apply subject to any modifications contained in the regulations.
	7 In section 26(1) (exception: tenants of certain public authorities) for statements of account substitute service charge information, reports on such information.
	8 In section 27 (exception: rent registered and not entered as variable) for statements of account substitute service charge information, reports on such information.
	9 Omit section 28 (meaning of qualified accountant).
	10 In section 39 (index of defined expressions) omit the entry in the Table for qualified accountant.
	 Landlord and Tenant Act 1987 (c. 31)
	11 The Landlord and Tenant Act 1987 is amended as follows.
	12 (1) Section 42A (service charge contributions to be held in designated account) is amended as follows.
	(2) In subsection (2)
	(a) for paragraph (b) substitute
	(b) any other sums held in the account are sums standing to the credit of one or more other trust funds,, and
	(b) for Secretary of State substitute appropriate national authority.
	(3) After subsection (2) insert
	(2A) The appropriate national authority may by regulations ensure that a payee who holds more than one trust fund in the same designated account cannot move any of those funds to another designated account unless conditions specified in the regulations are met.
	(4) In subsection (3)(a)
	(a) after subsection (1) is insert , or regulations under subsection (2A) are,, and
	(b) for them substitute such documents.
	(5) In subsections (5), (6), (7) and (8) for this section substitute subsection (3).
	(6) After subsection (9) insert
	(9A) Regulations under subsection (2A) may include provision about 
	(a) the circumstances in which a contributing tenant who has reasonable grounds for believing that the payee has not complied with a duty imposed on him by the regulations may withhold payment of a service charge,
	(b) the period for which payment may be so withheld,
	(c) the amount of service charge that may be so withheld;
	and the regulations may provide that any provisions of the contributing tenant's tenancy relating to non-payment or late payment of service charge do not have effect in relation to the period for which the payment is so withheld.
	(7) In subsection (10)
	(a) after this section insert or in regulations under subsection (2A), and
	(b) for Secretary of State substitute appropriate national authority.
	(8) After subsection (10) insert
	(10A) Regulations under this section may
	(a) make different provision for different cases, including different provision for different areas,
	(b) contain such supplementary, incidental, consequential, transitional, transitory or saving provision as the appropriate national authority considers appropriate.
	(10B) Regulations under this section are to be made by statutory instrument which
	(a) in the case of regulations made by the Secretary of State, is to be subject to annulment in pursuance of a resolution of either House of Parliament, and
	(b) in the case of regulations made by the Welsh Ministers, is to be subject to annulment in pursuance of a resolution of the National Assembly for Wales.
	(9) In subsection (11)
	(a) after section insert
	the appropriate national authority
	(i) in relation to England, means the Secretary of State, and(ii) in relation to Wales, means the Welsh Ministers,, and
	(b) in the definition of relevant financial institution for Secretary of State substitute appropriate national authority.
	13 (1) Section 53 (regulations and orders) is amended as follows.
	(2) In subsection (2)(b) omit or 42A.
	(3) After subsection (2) insert
	(3) This section does not apply to any power to make regulations under section 42A.
	 Leasehold Reform, Housing and Urban Development Act 1993 (c. 28)
	14 The Leasehold Reform, Housing and Urban Development Act 1993 is amended as follows.
	15 (1) Section 78 (management audits) is amended as follows.
	(2) In subsection (4) for paragraphs (a) and (b), and the and following paragraph (b), substitute
	(a) he is
	(i) a member of a body which is a recognised supervisory body for the purposes of Part 42 of the Companies Act 2006;
	(ii) a qualified surveyor; or
	(iii) where the landlord is a relevant landlord, a member of the Chartered Institute of Public Finance and Accountancy;
	(b) he is not any of the following
	(i) an officer, employee or partner of the landlord or, where the landlord is a company, of an associated company;
	(ii) a person who is a partner or employee of any such officer or employee;
	(iii) an agent of the landlord who is a managing agent for any premises to which the audit in question relates; or
	(iv) an employee or partner of any such agent; and.
	(3) After subsection (5) insert
	(5A) For the purposes of subsection (4)(b)(i) above a company is associated with a landlord company if it is the landlord's holding company, a subsidiary of the landlord or another subsidiary of the landlord's holding company.
	(5B) Subsection (4)(b)(i) does not apply where the landlord is a relevant landlord.
	(5C) For the purposes of subsection (4)(b)(iii) above a person is a managing agent for any premises if he has been appointed to discharge any of the landlord's obligations relating to the management by the landlord of the premises.
	(4) After subsection (6) insert
	(7) In this section
	holding company and subsidiary have the meanings given by section 1159 of the Companies Act 2006;
	relevant landlord means
	(a) a local authority (within the meaning of the Landlord and Tenant Act 1985);(b) a National Park authority; or(c) a new town corporation (within the meaning of the Act of 1985).
	16 In section 79(2)(a) (rights exercisable in connection with management audits)
	(a) for the words from the matters to supplied substitute information required to be provided, and
	(b) for under substitute by virtue of.'. [Liz Blackman.]
	 Brought up, read the First time, and added to the Bill.

Schedule 7
	  
	Amendments of enactiments: Part 1

Amendment made: No. 27, in page 175, line 12, at end insert
	 'Greater London Authority Act 1999 (c. 29)
	8A The Greater London Authority Act 1999 is amended as follows.
	8B (1) Section 333A (the London housing strategy) is amended as follows.
	(2) In subsection (3)
	(a) in paragraph (a) for Housing Corporation for the purpose of making housing grant substitute Homes and Communities Agency, and
	(b) in paragraph (b)
	(i) for Housing Corporation, in the first place where it appears, substitute Homes and Communities Agency,
	(ii) for making housing grant substitute giving housing financial assistance, and
	(iii) omit the words from (and see also to the end of the paragraph.
	(3) In subsection (4)
	(a) in paragraph (a)
	(i) for grant, in both places where it appears, substitute housing financial assistance,
	(ii) for made substitute given, and
	(iii) for payable substitute given, and
	(b) in paragraph (b) for grant substitute housing financial assistance.
	(4) In subsection (8)(a) for Housing Corporation substitute Homes and Communities Agency.
	(5) In subsection (10)
	(a) for the definition of housing grant substitute
	housing financial assistance means financial assistance given under section 22 of the Housing and Regeneration Act 2008 in connection with the provision of housing accommodation;,
	(b) after the definition of local housing authority insert
	provide, in relation to houses or housing accommodation, includes
	(i) provide by way of acquisition, construction, conversion, improvement or repair; and(ii) provide indirectly;, and
	(c) omit the words from and the reference to the end.
	8C In section 333D (duty to have regard to the London housing strategy)
	(a) in the heading for Housing Corporation substitute Homes and Communities Agency, and
	(b) in subsection (1) for the words from under to Corporation substitute relating to Greater London and conferred by or under Part 1 of the Housing and Regeneration Act 2008 (other than any function conferred by virtue of section 13 or 14 of that Act), the Homes and Communities Agency.'. [Liz Blackman.]

Schedule 11
	  
	Repeals

Amendments made: No. 51, in page 189, line 44, column 2, at beginning insert
	
		
			  'In section 85(3)(a), the words from or payments to profits),.'. 
		
	
	No. 7, in page 189, line 50, at end insert
	
		
			 'Housing Associations Act 1985 (c. 69) Section 33A.'. 
		
	
	No. 52, in page 189, line 50, at end insert
	
		
			 'Landlord and Tenant Act 1985 (c. 70) Section 28. 
			  In section 39, the entry in the Table for qualified accountant. 
			 Landlord and Tenant Act 1987 (c. 31) In section 53(2)(b), the words or 42A. 
			  In Schedule 2, paragraph 9 and the italic heading before it.'. 
		
	
	No. 53, in page 189, line 51, column 2, at beginning insert
	
		
			  'In section 9(3), the words from or payments to profits).'. 
		
	
	No. 8, in page 190, line 2, at end insert
	
		
			  'In Schedule 6, paragraph 24.'. 
		
	
	No. 129, in page 190, line 3, column 2, at beginning insert
	
		
			  'Section 173(6).'. 
		
	
	No. 54, in page 190, line 6, at end insert
	
		
			 'Companies Act 1989 (Eligibility for Appointment as Company Auditor) (Consequential Amendments) Regulations 1991 (S.I. 1991/1997) In the Schedule, paragraph 60 and the heading before it.'. 
		
	
	No. 55, in page 190, line 22, at end insert
	
		
			 'Environment Act 1995 (c. 25) In Schedule 10, paragraph 25(2).'. 
		
	
	No. 56, in page 190, line 25, column 2, at end insert
	
		
			  'Section 127(3). 
			  Section 143D(3).'. 
		
	
	No. 130, in page 190, line 43, leave out 'paragraph' and insert
	'paragraphs 15(19), 18(10)(a) and (12)(a), 19(7)(a) and'.
	No. 57, in page 191, line 2, column 2, at beginning insert
	
		
			  'In Schedule 15, paragraph 13.'. 
		
	
	No. 9, in page 191, line 2, after 'paragraphs' insert '26,'.
	No. 28, in page 191, line 9, at end insert
	
		
			 'Greater London Authority Act 1999 (c. 29) In section 333A 
			  (a) in subsection (3)(b), the words from (and see also to the end of the paragraph, 
			  (b) in subsection (10), the words from and the reference to the end.'. 
		
	
	No. 58, in page 191, line 15, column 2, at end insert
	
		
			  'Section 156(2). 
			  In Schedule 10, paragraphs 6 and 7 and the italic heading before paragraph 6.'. 
		
	
	No. 59, in page 191, line 20, at end insert
	
		
			 'Anti-social Behaviour Act 2003 (c. 38) Section 14(1)(b).'. 
		
	
	 [Liz Blackman.]
	 Order for Third Reading read.[Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, on behalf of Duchy of Cornwall, signified.]

Iain Wright: I beg to move, That the Bill be now read the Third time.
	Before I begin my substantive remarks, I thank hon. Members of all parties who served on the Public Bill Committee. As I said earlier, they applied forensic scrutiny to our deliberations. As someone who has taken the Bill through all its stages in this House and feels protective towards it, I thank all hon. Members for their work. I thank the officials who worked on the Bill and the Clerks. I also thank the witnesses who shaped our deliberations in December during the evidence sessions. The Bill leaves the House for the other place in a much improved form.

Simon Hughes: I will ask a question that I tried to ask previously because the Under-Secretary will now be allowed to answer it. Since the Bill left here after Second Reading, how many amendments have the Government accepted from Opposition parties?

Iain Wright: I do not have the information to hand at the moment, but I am sure we can tally that up at some point.
	We have listened to concerns from hon. Members of all parties. We have made substantial amendments to the definition of social housing in response to concerns about means-testing, which was never our intention.

Roberta Blackman-Woods: The Minister took on board the most important amendment, which dealt with including sustainability and the need to promote sustainable development in the objectives of the new homes and communities agency.

Iain Wright: I agree. I pay tribute to my hon. Friend and the valiant manner in which she battled about that concern.
	The other key element involved the whole regulatory regime. Members of the Committee expressed anxieties about the risks of policy passporting and micro-management by the Secretary of State through the regulator of registered providers and registered social landlords. That was never our intention and I believe that locks in the Bill will prevent that. However, we listened to hon. Members' concerns and tabled amendments to address them.

Nick Raynsford: I thank my hon. Friend personally for the extremely careful attention that he gave to those issues and for agreeing to table amendments dealing both with the definition of the Secretary of State's power to direct and with the role and intervention powers of the regulator. All have helped to ensure that the objectivea proportionate but hands-off style of regulationcan be carried forward. If that is achieved, we will definitely have made an improvement to the Bill.

Iain Wright: For my part, I thank my right hon. Friend for all the personal assistance that he has given me on the amendments. His work and experience have been invaluable to me.
	The amendments that we tabled address the sector's concerns. We are reinforcing the view that the Secretary of State's role should be limited to strategic directions, with direct influence only on key issues such as rent, physical maintenance and tenant empowerment, which is right. The regulator's standards should be outcome- focused wherever possible, should not threaten the status of charitable providers and, crucially, should take account of the desirability of registered social landlord boards managing their own business and setting their own corporate direction.
	Finally, an important group of amendments ensures that the regulator should be able fully to intervene to address tenants' concerns only where there is a material breach of standards, including on a single estate. You might rule me out of order for mentioning this, Mr. Deputy Speaker, but that will for ever be known as the Emily Thornberry test, after my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry), who on Second Reading rightly mentioned the rat-infested estates and the lack of co-operation that housing associations display in dealing with her. That group of amendments and the powers of the regulator allow it to intervene on those points, but not on minor or trivial points.
	We have improved the Bill. I pay tribute to the hon. Members for Welwyn Hatfield (Grant Shapps), for Montgomeryshire (Lembit pik) and for North-East Bedfordshire (Alistair Burt) for their fantastic work in scrutinising the Bill. It has been a pleasure to serve with them. I particularly want to thank those titans, the Privy Councillors on the Committee, the right hon. Member for North-West Hampshire (Sir George Young) and my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), who, as former housing Ministers, provided genuine expertise. Their help, co-operation and, at times, criticism have helped to improve the Bill.
	I want other hon. Members to participate in this Third Reading debate, so I conclude my remarks by saying that the Bill is an important measure. It sets in statute two new housing bodies: the Homes and Communities Agency, which will invest in regeneration and new housing supply and play a key role in achieving our ambition of delivering 3 million homes; and the new social housing regulator Oftenant, which will place tenants at the heart of social housing, driving improvements in standards.
	I am pleased by the wide consensus on the benefits of establishing those organisations, which was clear from our Committee deliberations and the oral evidence that we took from stakeholders. We have been challenged on the details, but not the principles. The Bill leaves this place in a much better state than when it first started.

Margaret Moran: I agree with my hon. Friend that the debates in Committee were useful, one of which was on amending some of the clauses dealing with domestic violence, on which he made some commitments. We tried to ensure in previous housing legislation that survivors of domestic violence would not be penalised through losing their homes and would be safeguarded under homelessness legislation, but we have apparently failed, because there is still a postcode lottery in provision and safety for them. Will my hon. Friend say briefly what he intends to do as a result of that discussion?

Iain Wright: I am glad that my hon. Friend has mentioned that. She is a champion of trying to prevent and minimise domestic violence, and the amendment that she and my hon. Friend the Member for Edmonton (Mr. Love) tabled was important. I want to help as much as possible, and she will be aware of the meeting that we had last week. I am keen to pursue policy on the basis of evidence and for that reason was concerned about what was said in Committee about policy passporting and differing interpretations of the term vulnerability. I therefore agreed last week to work with her on a review to see to what extent that policy postcode lottery and that test of vulnerability apply to different parts of the country. I am keen to move forward on that, but I want to do it on the basis of clear evidence. I hope that she agrees with me and will co-operate with me on that basis.
	As I say, I want to ensure that other hon. Members can contribute to the Third Reading debate. I look forward to handing the Bill on to the other place in a much improved state. I have been with it from its start and I am very proud of it. I commend it to the House.

Grant Shapps: The Bill initially contained more than 300 clauses, and on Second Reading I mentioned its size; little did I know that down the line in Committee there would be another 242-odd Government new clauses, and that today a further 137 amendments would be tabled at the last minute, with no time to debate them properly. Today's debate demonstrated just how ineffective the House has been made to be. There was limited time to consider literally hundreds of amendments and new clauses to the Bill. It is completely unsatisfactory.
	It is not that the Bill is inherently evil, or that the Minister and the Government are intent on destroying homes and creating bureaucracies that will prevent people from being able to live in affordable housing; they just fundamentally misunderstood the best way of delivering their objectives. They know that they have a lamentable record on housing delivery over the past 10 years. We know that the average number of homes built every year during our time in office was 176,000, and that the figure is only 146,000 under this Government. Social housing, which was mentioned today and many times in Committee, is being built at a very limited rate. We were building more homes on average in each of our 18 years in office than Labour built in any of its 10 yearsa situation that has greatly frustrated Labour Back Benchers, as the Minister knows. In addition, homelessness among children has risen dramatically under this Government. There are twice as many homeless children as there were 10 years ago. The figure has doubled to 130,000.
	We know that there are all sorts of problems in the supply and provision of housing, but the Bill does very little to resolve them. It seeks to resolve them through more top-down managementexactly the kind of problem that got the Government into a low-level house building programme in the first place. The Bill is Whitehall driven, centralised and bureaucratic, and it gives powers to a new quango. We do not know how that quango will behave in future. The Minister mentioned earlier that Sir Bob Kerslake, the new chief executive of the Homes and Communities Agency, said that the agency would be able to act on local vision and work with local partners. That may well be true, but that is not what it says in the Bill. The problem is that despite the fact that one chief executive thinks that he can act in that way under the terms of the Bill, what matters is what is actually in the Bill and the way in which it is written. It has been written to dictate centralised targets from above to people down below.
	However one cuts ithowever one reads the Billone realises that it is about creating targets and the Government trying to drive through their famous target of 3 million homes by 2020. Never mind the fact that the Government are already missing the target that enables them to reach that 2020 target, or the fact that they have missed their targets for the past 11 years, as I described; misguidedly, they still think that the solution is to put a top-down weight on local people. What came out most clearly both in Committee andto a limited extent, because of the brevity of this debatetoday is the idea that there is a better way of doing things.
	We could work with, trust and rely on local communities by incentivising them to build the housing that we need. For some reason, the Government feel that that is a dogma that they could not possibly adopt. The idea of working with, rather than against, local peoplethe idea that people should not have to create campaigns to try to protect their local areais anathema to the Government. It does not need to be like that. We can encourage local communities to create the homes that are needed by incentivising them. We can do that by ensuring that infrastructure follows housing, and by ensuring that local communities are financially benefited as and when housing comes to an area. There must also be joined-up thinking, so that when the people in an area agree to build more housing, there is something in it for local people.
	When we ask ourselves honestly what incentive the Bill provides for local people to agree to or even encourage the building of housing in their areas, the answer is Absolutely none. The truth is that it will invariably destroy the quality of life rather than enhance it. We do not believe that things need to be like that: housing and development should not have a bad name. It is the policies that have been followed for the past 10 years, gold-plated by the Bill, that have got us into this mess.
	What has happened in this instance is a bit like what has happened to the word consultation. Under the present Government, no one believes that a consultation is genuine. The very meaning of the wordits definition in the Oxford English Dictionaryhas been degraded by the sham consultations of the past few years. The same muddied cloud now hangs over the word development, and the Bill does nothing to address that.
	It could all be so different. Local areas could vie with each other to build sustainable housing in which everyone would want to live. Existing communities could benefit, enjoying the extra services and improving their areas by backing developments. However, the Bill does nothing to favour that approach. Instead, it looks to the heavy hand of top-down government from Whitehall. When local people object to development proposals, the Homes and Communities Agency will have the power to override their objections. There is very little to commend the Bill to the House. We had a great opportunity to provide the amount of housing that we know we need to accommodate a nation, but that opportunity has been missed.
	The Minister claimed today that the purpose of all those amendments had been to take account of the will of the Committee and the House, but he was unable to answer a simple question about the number of Opposition amendments that he had accepted. In fact, the reason there were so many amendments is not that this is a tremendous Bill, but that the Minister has dithered a great deal.

Iain Wright: May I point out to the hon. Gentleman that he has not once mentioned the creation of Oftenant? Are tenant standards so low on the Conservatives' agenda?

Grant Shapps: I do not want to take up other Members' time. I will simply say that it is difficult to understand why Oftenant should apply to some houses and not others. The Minister was unable to explain that in Committee, and he has been unable to explain it today. The Bill is, if nothing else, inconsistent.

Lembit �pik: I enjoyed serving on the Committee with the Minister. I think that he has genuinely listened. Above all today, I have acceptedand respectthe fact that the specific case that I raised in relation to amendments Nos. 14 and 15 will be considered. I think that that will prove to be a valuable step forward.
	I approve of the creation of Oftenant. We felt that the name was faulty, but the best alternatives that we could come up with were Ofsquat and Ofhome, so we will stick to Oftenant for now.
	The Bill has become complicated. We did not have enough time to examine the details, and I think the Minister will admit privately that the Government crammed an awful lot into a very short time today. The problem was exacerbated by the urgent question that was debated earlier. I hope that that means that the Government will show patience in another place, and will allow proper scrutiny of the parts of the Bill that we could not scrutinise here.
	I think that the most important point to be made is that if the HCA works properly, it will help the Government to meet the target that we all want to meetthe provision of 3 million new homes. As the hon. Member for Welwyn Hatfield (Grant Shapps) observed, if it is given free rein to wander into the activities of other quangos it may become a great, burdensome monster that will get in the way. However, I am choosing to be an optimist. Having listened to the Minister's elucidation of how much he loves the Bill, I feel that I am looking at its parents sitting proudly on the Front Bench after nurturing it thus far.
	The Liberal Democrats want the Bill to work. We want it to be successful, and we want to meet that target. We want both a good quality of life and high standards of community development, and I think I can say with confidence that if the HCA achieves that, the months we have spent improving the Bill will not have been wasted.

George Young: I congratulate the Minister on a very sure-footed performance. I say that while his boss, the Minister for Housing, the right hon. Member for Don Valley (Caroline Flint), is sitting next to him. He did an heroic job in Committee, and I am sure he has been earmarked for promotion to other Departments that are more accident-prone than the one in which he currently serves. He did a first-class job.
	The Minister will have noticed that there has been a total change in the housing climate since we debated the Bill on Second Reading in November. It is now a much colder climate than when we started. The base rate has gone down, but the borrowing rates have gone up. If we look at reports of house builders, we find that they are less optimistic; and 50 per cent. of the Housing Corporation's target is now on the back of market housing
	 It being Ten o'clock, Mr. Deputy Speaker  put the Question already proposed from the Chair, pursuant to Order [27 November].
	 Question agreed to.
	 Bill read the Third time, and passed.

Simon Hughes: On a point of order, Mr. Deputy Speaker. I seek your guidance as a result of frustration. I appreciate that this may not be a matter that you can deal with now, but four of the groups selected by Mr. Speaker for debate were not touched on at all and in one group we debated only one provision and the bulk of amendments and new clauses were not debated. In addition to taking other steps outside this place, I seek your guidance on whether it would be possible, if the Government were minded to do so, to change the timetable for debate on Report. Could a motion to change the timetable be brought forward when it was absolutely obvious, once Report stage had started, that nothing like the bulk of the work set out was going to be done? Will you confirm whether that would be acceptable, Mr. Deputy Speaker, as it would help us to understand how to deal with Bills that have so many Government amendments and new clauses appended to them in future? The Leader of the House said that she was willing to look further into that as a major parliamentary issue.

Mr. Deputy Speaker: In all these matters, the initiative lies with the Government. There may be occasions on which they may wish to put a different or amended programme motion before the House, but as the hon. Gentleman knows, I am afraid that that is not a matter for me. We are getting used to the procedure of programme motions and it is all a matter of judgment on each occasion as to whether sufficient timein the eyes of the whole Househas been provided.

Northern Rock

Mark Hoban: I beg to move,
	That an humble Address be presented to Her Majesty, praying that the Northern Rock plc Transfer Order 2008 (S.I., 2008, No. 432), dated 21st February 2008, a copy of which was laid before this House on 21st February, be annulled.
	The timely publication this morning of Northern Rock's business plan and accounts again calls into question the Government's decision to nationalise the bank. As one reads through the documents, the gamble that the Prime Minister and the Chancellor took by nationalising Northern Rock last month becomes clearer and clearer. Whether we get back all the money lent by the taxpayer depends on Ron Sandler's being able to turn around the business, shrink the mortgage book and rebuild the deposit base.
	Yet it has taken the Government since September to get us to this point and it took them five months to decide the future of Northern Rockfive months from when Northern Rock was offered emergency funding to the point of nationalisation and five months of uncertainty for its employees, customers and the business. Although the problems at Northern Rock were a consequence of the management's strategy, it is clear that the Government exacerbated the problem through their handling of the crisis.
	Let us look at the way the Government handled the decision to provide Northern Rock with emergency funds. The announcement triggered a run on the bank, which could be stemmed only by a guarantee of retail deposits, but as the Treasury Select Committee made clear in its excellent report Run on the Rock:
	The cumulative effect was... to make the run on the deposits of Northern Rock more prolonged, and more damaging to the health of the company, than might otherwise have been the case.
	It will therefore be harder for Ron Sandler and his team to rebuild the vital retail depositor base, which will play an important role in refinancing the business on more conventional lines and also in repaying the loans to the taxpayer.

John Redwood: Does my hon. Friend agree that there is a contradiction in that rapid repayment of the Treasury money requires contracting the business, whereas fattening the business up for resale requires growing it? It is quite difficult to understand how the management can do both.

Mark Hoban: Indeed. My right hon. Friend identifies an important issue at the heart of the matter. The business plan before us today in the form of the Chancellor's written ministerial statement talks about repayment of the loan, but does not provide a date by which Northern Rock will exit public ownership. There is a contradiction there, but the first priority must be to repay the loans to eliminate the taxpayer's exposure.
	Of course the problem that Northern Rock will have after the five months of dither and delay is that the business itself has made no progress in that time, as the interim management waited for the Treasury to decide what it would do with Northern Rock. The way in which the Government handled Northern Rock stands in stark contrast to the prompt action on Bear Stearns by the US authorities, which were able to organise a private sector solution over a weekend. Of course, we know from the Treasury Committee report and elsewhere that a private sector solution was on the table for Northern Rock before September, but it is clear that the Government turned it down. I wonder how much the Chancellor regrets making the decision back in August, when he washed himself of all sorts of problems, not to accept the offer that was apparently on the table at the time.

Stewart Hosie: I share the hon. Gentleman's frustration about the use of the weekend takeover as an excuse not to act earlier. I think that I share his frustration that a Lloyds TSB bid was not accepted. I certainly share the frustration of many people that the Bank of England did not increase liquidity late last summer, when it could have done so. I understand what the Opposition are trying to do with the annulment motion today, but does he not feel that, if they annul the order, it might further weaken confidence in the banking sector, which ishow can I put this gently?rather brittle at the moment?

Mark Hoban: It would be to the benefit, because there are better solutions to Northern Rock's problems than the one before us today. We have argued that case for some time, and I shall touch on that briefly towards the end of my speech.
	To go back to the comparison with the US, Bear Stearns shareholders now have certainty over the value of their sharesunlike Northern Rock shareholders, who have to wait until the independent valuer tells them how much their shares are worth. Of course, JP Morgan Chase will pay for the compensation and buy the shares, not the US taxpayer; whereas, in the UK, the UK taxpayer will have to compensate Northern Rock shareholders for the nationalisation.
	In reality, although for some people nationalisation was the end of the story and the solution to the problem, it is not an end in itself and the publication of the business plan and accounts today demonstrates that. The two documents clearly point out the risks that the taxpayer has assumed as a consequence of nationalisation. The order transfers ownership of Northern Rock from its shareholders to the taxpayer, but it transfers the risks, too. The regulatory impact assessment published alongside the order gives no assessment of the risks assumed by the taxpayer. When the Chancellor signed off the RIA, he said that it represents a reasonable view of the likely costs and benefits, yet no numbers were attached to the RIA to back up that assertion, whereas the accounts and the business plan make plain the scale of the challenge that faces Northern Rock and therefore the risks borne by the taxpayer.
	The Chancellor in his written statement today supports the objective that Northern Rock repay its loan to the Bank of England by 2010 and release guarantees by 2011, so we know that taxpayers' exposure to Northern Rock will continue beyond the next general election. But as the business plan makes clear on page 8, the repayment of the loans by 2010 is an assumption that is part of the base case of the management's plans. I wonder whether the Chief Secretary can tell us how long it will take to repay the loans using the management's worst case scenario? The Treasury has access to the forecasts that the management prepare, so she should be able to tell us the worst case scenario for repaying the debt.
	Yet even the statement that the debt will be repaid by 2010 is at odds with the views of Ron Sandler, who wrote to Northern Rock customersI have here a letter that was passed to me by a mortgage holder at Northern Rockabout repaying the bank's debt in full and said:
	We aim to achieve this over the next three to four years.
	That is by 2011 or 2012a much more pessimistic assumption than the line that the Treasury has been spinning today. Can the Chief Secretary explain the discrepancy between the Treasury line put out today and the line that the man whom they handpicked to run Northern Rock has taken in talking to customers?
	Let us be clear: we want the loans to be repaid as soon as possible. We expect the Government to stand by the commitment that the Chancellor gave on 19 November:
	we fully expect to get
	the money
	back.[ Official Report, 19 November 2007; Vol. 467, c. 972.]
	However, we recognise that the changes that need to be brought about to achieve that will lead to job losses in the north-east. They will come about as Northern Rock wants to shrink its mortgage book over the next three years. In 2011, its share of the mortgage market is forecast to be about 2.4 per cent. compared with 7.5 per cent. last year, and its assets will shrink from 107 billion to 49 billion.
	To achieve that, Northern Rock customers coming to the end of their fixed terms will need to be encouraged to move to other providers. In the current circumstances, that will be relatively straightforward for customers who present a low risk, who have low loan-to-value ratios on their mortgages, or who have good credit histories. Is there not a danger, however, that the more risky customers will have to stay with Northern Rock, thereby reducing the overall quality of its loan book and exposing taxpayers to greater risk of defaultsand defaults would, of course, be a cost we would pick up? The overall quality of the loan book will deteriorate as people who cannot find an alternative are forced to stick with the standard variable rate that Northern Rock offers. Therefore, there is a risk to the value of the assets.
	Will the Chief Secretary clarify what the table on page 10 of the business plan means? It refers to net assets before fair value adjustments. Is that to do with further write-offs of structured investment vehicles, or is it to prepare us for the write-off of further Northern Rock assets? If there are further write-offs, will the taxpayer not have to pick up the tab?
	In our debates on Northern Rock, the Chancellor has always reassured us about the quality of the loan book, yet the accounts that were published today present a much less rosy picture. Northern Rock's impairment figures have deteriorated between two and three times the average of the Council of Mortgage Lenders figures for residential mortgages. The accounts also make it clear that the more aggressive approach to arrears that Northern Rock has introduced has led to a fourfold increase in the number of homes that it owns through repossession. Are the Government content with the practice on repossessions that Northern Rock has instituted?
	Despite the Chancellor's reassurances about the quality of the loan book, we see in the accounts published today a rapid deterioration in the loan book and a sharp increase in repossessions. Is the Chief Secretary prepared to reiterate the confirmation the Chancellor has given on the quality of the loans that the taxpayer has, in effect, taken on through the nationalisation of Northern Rock?
	Another aspect of the recovery planand justification for nationalisationis the proposed build-up of retail deposits from about 10 billion at the end of 2007 to 20 billion in 2011. That depends on Northern Rock's ability to rebuild depositor confidence. However, there is a challenge here, because we are now entering into a more competitive phase for deposits as a consequence of the closing off of wholesale markets to financial institutions. What assessment have the Government made of the likelihood of Northern Rock doubling its deposits by 2011, and what will be the impact on achieving the 2010 deadline if it does not?
	Will the Chief Secretary also confirm that the commitment given in the appendix to the business plan that Northern Rock will rank outside the top three in any one of the Moneyfacts retail deposits categories for the remainder of 2008 extend beyond then? One of the concerns raised when this House and the other place discussed the Banking (Special Provisions) Act 2008 was the impact that the Government guarantee arising through nationalisation could have on competition for both loans and savings. People are rightly concerned that Northern Rock might take advantage of its privileged status as a Government-backed bank to offer better rates than its competitors. Will the commitment on savings extend beyond 2008?
	The taxpayer's exposure to Northern Rock will depend not only on the loan book and the ability to rebuild customer deposits, but on the operating results of the company in public ownership. In 2007, it made a loss of 141 million. The business plan predicts that it will make substantial losses in 2008 and will return to break-even only in 2011. How much will Northern Rock cost the taxpayer over the next three years, simply in terms of its operational results? In deciding to acquire Northern Rock, did the Treasury understand that it would be loss-making from 2008 onwards?
	My next point refers back to one made by my right hon. Friend the Member for Wokingham (Mr. Redwood). The plan sets out a timetable of the repayment for the taxpayer-backed loans and releasing the guarantee, but contains nothing to indicate when either the Government or Northern Rock expect the bank to return to the private sector. Will the Minister tell us whether privatisation will happen as soon as the loans are repaid? Have other conditions been set that will trigger the bank's privatisation?
	Notwithstanding this evening's proceedings, the business plan is still subject to approval by the EU, and it could, of course, ask Northern Rock to revise its business plan. That could have an impact on how quickly Northern Rock's strategy would be effective in reducing the level of the taxpayer loans and so on. Will the Chief Secretary tell us when she expects to receive the Commission's approval of Northern Rock's business plan? Until that clarification is received there will clearly be an important uncertainty that affects the way in which the business is run. There are potential risks in respect of the objective that the taxpayer-backed loans will be repaid by 2010. Tonight's debate gives the Chief Secretary the opportunity to confirm, without qualification and caveat, that the taxpayer will pay not one penny towards the cost of rescuing Northern Rock, and I hope that she will take it.
	There were some unfinished pieces of business from our debate on the Banking (Special Provisions) Act 2008, one of which has now been clarified with the publication of today's accounts and is crucial to understanding the liabilities that will be assumed by the taxpayer through this Order. On Second Reading and on Third Reading some debate took place between the Chief Secretary and my Conservative colleagues and some Labour Members about Granite. It is clear that the risks associated with Granite will be borne by Northern Rock. Today's accounts make a statement about Granite being
	regarded as legal subsidiaries under UK companies legislation. This is because they are principally engaged in providing a source of long term funding to the Group, which in substance has the rights to all the benefits from the activities of the SPEs. They are effectively controlled by the Group.
	The Office for National Statistics said in its evidence to the Select Committee on Treasury that the risks and rewards of Granite accrue to Northern Rock and thus to the taxpayer.
	Does the Chief Secretary now accept that she was wrong in a response that she gave to an intervention from my hon. Friend the Member for Ludlow (Mr. Dunne) during the debate on the Act? She said:
	We have also repeatedly made it clear that the Government guarantees apply to Northern Rock and not to Granite.[ Official Report, 21 February 2008; Vol. 472, c. 631.]
	The reality of the accounts today is that the taxpayer bears the risk. The risk is not being ring-fenced, kept to one side or kept offshore. The risks and rewards of Granite accrue to Northern Rock, and they will be borne by the taxpayer.
	The other matter that we debated as the Act was going through Parliament was the framework agreement. It was deposited in the Library today, yet as Northern Rock's report makes clear, the agreement was in place from 22 Februarythe day that Northern Rock was nationalised. Can the Chief Secretary tell us why Parliament was not presented with the document earlier? Why did we have to wait until today's debate and the publication of today's accounts for the document to be placed in the Library? Is that not another example of the Government riding roughshod over Parliament?
	Although our debate focused primarily on Northern Rock, it is worth remembering that the Act enables the Government to nationalise any other bank where lender of last resort status has been given and that the taxpayer assumes an open-ended commitment without effective parliamentary scrutiny. Today's debate seeks to annul an order that had been made last month. Parliament should be given the right to approve nationalisation before it takes place, rather than debate it retrospectively. Parliament should have the power to veto these proposals, rather than be treated as a doormat by an over-mighty Executive. The Prime Minister talks about strengthening Parliament, but he undermines its authority through measures such as this.
	The publication of the accounts and business plan today makes it very clear that nationalisation is not the end of the Northern Rock story. The Government's mishandling of the Northern Rock crisis has led to the risk that taxpayers will not get back all the money we have lent to the bank. The repayment depends on the bank's ability to manage down the mortgage book and to rebuild customer deposits and the viability of the remaining business, EU state aid approval, and the state of the housing market. The Government have gambled our money on Ron Sandler and his management team, but we know it need not have been like this. As the rescue of Bear Stearns shows, private sector solutions can be found to the problems created by the credit squeeze.
	We also believe that nationalisation was not the only alternative. The Chancellor proposed that in future failing banks could be dealt with through a form of administration. We believe that that could have been the answer to the question. It would have presented a better deal for the taxpayer and the assets could have been realised in a way that protected the interests of taxpayers, rather than exposing them to ongoing continued risk until 2010-11. The Government rejected that course of action despite endorsing it for the future.
	The Northern Rock story will run on and on. Even based on today's announcement, the liability of the taxpayer will run beyond the next general election, leaving another problem for the next Conservative Government to sort out.

Yvette Cooper: We are debating the transfer order to take Northern Rock into temporary public ownership. I am disappointed that the hon. Member for Fareham (Mr. Hoban) and his party have chosen to pray against it. This morning, Northern Rock published its annual accounts for 2007 and a more detailed business plan. I shall refer to them in responding.
	We need to be clear about the purpose of the order. It will take Northern Rock into temporary public ownership in order to safeguard the financial stability of the banking system and the financial interests of the taxpayer. The Chancellor set out three objectives that have guided everything that we have done in relation to Northern Rock: maintaining financial stability; protecting consumers; and protecting the taxpayer. The decisions that we have made have shown how seriously we take the financial stability of the banking system. The Government are prepared to take strong action and make difficult decisions in order to safeguard that financial stability. Given the turbulence in the financial markets in the summer, the ongoing credit squeeze and the series of problems with Northern Rock's business model in the autumn, it is clear that without intervention Northern Rock would have gone down. That would have had serious risks not only for depositors and creditors but for the stability of the banking system. That would not have been in the public interest. That is why we took action and why it was right to do so. That is why we authorised the Bank of England to provide support and stepped in with the Government guarantee arrangements last autumn. That was supported by hon. Members from both sides of the House at the time.
	We have searched for alternative options, including private sector takeovers. In trying to ensure that we protect the taxpayer, we have made it clear that temporary public ownership is the best deal. That is in part because of the state of the market. The alternative deals were simply not good enough for the taxpayer.

Philip Dunne: Will the Chief Secretary enlighten the House on whether the Chancellor took advice or was given guidance during his discussions with the US Secretary of State, Secretary Paulson, on his experience in securing a rapid decision-making process to take a bank that was getting into difficulty into private sector ownership? What lessons did the Chancellor learn from those discussions?

Yvette Cooper: Interestingly, the experience on the other side of the Atlantic has shown that banks across the world are facing serious pressures as a result of global economic and financial market turbulence. In many ways the situation with Bear Stearns was very different from that with Northern Rock. Bear Stearns is not a retail bank and does not have retail deposits, and so the implications for depositors as opposed to creditors were very different. There is a different legal framework and the situation was different as there were viable private sector offers on the table.
	Clearly, decisions have to be made about what is the best alternative in the circumstances faced in particular financial markets at particular times. Equally, it is important that we do not simply pretend that there are alternatives when they do not exist. That is why Opposition Members need to take a bit of responsibility. The decision was taken last autumn to support Northern Rock, through the Bank of England's loans and through Government guarantees. I reiterate my view that that was the right decision to take at the time, and it was supported in all parts of the House. Once it was taken, there were knock-on consequences that had to be faced up to. Opposition Members have repeatedly refused to do so.
	The hon. Member for Fareham repeatedly raised his concern that it was the decision to take Northern Rock into temporary public ownership that created exposure for the taxpayer. That is not the case. The taxpayer's exposure was created by the decisions that were taken in the autumn on both the Bank of England loan and the guarantees that were put in place. Having done that, and been clear that that was the right decision in the interests of protecting the financial stability of the banking system, it was then important that we ensured that the taxpayer's interest was protected. The options of insolvency, administration, Bank of England-led administration and wind-down, which were put forward by Opposition Members, would all have been a worse deal for the taxpayer than temporary public ownership and the business plan that we have now set out.

John Redwood: Surely the Chief Secretary can see that, if the Bank of England had simply acted as bank manager, and provided tough love to Northern Rock and managed it through it, we as taxpayers would not have had to absorb all the responsibilities and potential losses of sacking staff and losing on current trading. Will she confirm that she is accepting a business plan that means that the taxpayer will have to pay the losses in 2008, 2009 and 2010? Why do we need those as well?

Yvette Cooper: The right hon. Gentleman describes what he says would have been tough love by the Bank of England in managing it through. I presume that he is talking about the proposal, which Opposition Members have described, of a Bank of England-led administration. That would effectively use powers that do not currently exist. We think that there is a strong case for introducing a new special resolution regime, and that that would be the right thing to do. However, it would involve major changes to the law and the current approach to insolvency and failing or troubled banks. It is right that such proposals should be consulted on seriously and introduced through legislation. For Opposition Members to pray in aid powers that simply do not exist on the statute book, and think that they would somehow magically come to the rescue of Northern Rock, is pie in the sky and irresponsible. They are simply not facing up to the serious problems that Northern Rock faced.
	As hon. Members know, Northern Rock's new management team has presented the Government with a detailed business plan for their approval. It details how the new board intends to repay the Bank of England's loan, release the Government guarantee arrangements and return the business to the private sector. It is based around four strategic priorities: to contract into a smaller, sustainable business, reducing the asset base; to repay the Bank of England loan by the end of 2010, while increasing the level of retail deposits, although keeping them below 2007 levels; to restructure the organisation and its operations; and to strengthen risk management in key areas. The bank envisages repaying the loan by 2010, and 2.5 billion has already been repaid since the end of 2007.
	The business plan also addresses a concern that has been widely raised about Northern Rock's business modelits excessive dependency on the wholesale funding marketsand addresses that over-reliance by reducing the size of Northern Rock's asset base and by increasing its retail deposit base. It is important, and we have stressed throughout, that Northern Rock should not cause unfair competition in the rest of the financial markets. The business plan recognises that. Although the retail deposits will increase over the next three years, both Northern Rock's level of retail deposits and its share of the retail savings market will remain lower than at the start of last summer. The competitive framework that Northern Rock published as part of its business plan also commits it to not appearing in the top three of the best-buy tables for the rest of 2008. The framework will be kept under review and will remain subject to the requirements of the European Commission.

Mark Hoban: Will the Chief Secretary give a commitment that Northern Rock will not appear in the top three best-buy tables beyond 2008? Can she tell us what the total loss forecast for Northern Rock will be between now and 2011 in the business plan that the Treasury will approve?

Yvette Cooper: As I said 10 seconds ago, the competitive framework that Northern Rock published today as part of its business plan also commits it to not appearing in the top three of the best-buy tables for the rest of 2008. The framework and the overall approach will be kept under review, as is right. I remind Members that we have always said that we would engage in detailed discussions with the European Commission to make sure that we are compliant with the state-aid approach. With regard to the overall financial position for Northern Rock and for the taxpayer, we have made it clear that such an approach gives us the best deal for the taxpayer, who already had exposure as a result of the Bank of England loan and the guarantees that were put in place.
	Had we taken the approach that Opposition Members set out, and tried to go for the fire sale of the assets that they proposed, there would be considerable risk to the taxpayer, and to the Bank of England loan, which as a result of the business plan is now being repaid.

Mark Hoban: Will the Chief Secretary tell the House what the predicted losses are in the business plan that the Treasury will approve? It is clear that there will be substantial losses next year, in 2009 and 2010, with break-even in 2011. What will the losses be? The taxpayer will have to stump up for them. We need to know what they will be.

Yvette Cooper: Today, Northern Rock set out in its accounts what its financial position was for 2007, and it has set out its business plan for the next few years. It has set out a clear framework as part of the business plan, which involves repaying the loans from the Bank of England. It is important for the taxpayer that the loans are repaid, and we should be clear that under the approach repeatedly proposed by Opposition Members those loans from the Bank of England would be at stakethey would be put at risk. Opposition Members have never faced up to the fact that their completely incoherent and all-over-the-place approach would seriously put at risk not only support from the taxpayer as a result of the guarantees, but the approach taken by the Bank of England.

Graham Stuart: rose

Yvette Cooper: I shall give way once more, but I am conscious of the fact that Members from other parties also want to contribute to the debate.

Graham Stuart: My question is simple. What will the cumulative losses be before 2011?

Yvette Cooper: I say again that Northern Rock has set out its business plan; it has set out the series of actions it will take. Opposition Members have to recognise that to protect taxpayers we have ensured that their interests are safeguarded by a responsible approach to temporary public ownership, which they have rejected time and again. They seriously seem to think that getting the Bank of England or another organisation to sell off the assets would somehow result in a better deal for the taxpayer. However, the consequence would be to put the taxpayer at risk.

John Redwood: Will the right hon. Lady give way?

Yvette Cooper: I want to make some progress.
	Opposition Members have referred to the level of arrears as a result of Northern Rock's decisions. The level of arrears for Northern Rock has increased, just as it has across the market. However, it is still significantly below the Council of Mortgage Lenders average, so Northern Rock is in a very different position compared with other banks across the market. We know that Northern Rock had an unsustainable financial model; the bank needs to change its approach and it is right that it should do so. That is what the business plan does.
	In the end, the transfer order is about the decision to transfer. It is right to reflect on whether alternatives were available and whether they are still available. Opposition Members have asked us to oppose the transfer order, as they believe that the decision should be reversedan utterly irresponsible approach at a time when the financial markets continue to be in global turbulence and when we face a continued credit squeeze in the markets. It was right to seek private sector alternatives, and we made no secret of the fact that we would have preferred such an alternative. We were not prepared to go with a private sector bid at any pricewe were determined to protect the taxpayerand that was the right thing to do.

Stewart Hosie: The Minister said that she was not prepared to accept a deal at any price, and that is rather sensible. If all the stories are to be believed, however, early in the process it was going to be 2 a share from Lloyds TSB with a 10 billion credit line, which is a far better deal than 110 billion of potential liabilities should it all go wrong. Surely to goodness, 2 a share and a 10 billion credit line is a much better deal than a potential liability of 110 billion, which we are sitting on today.

Yvette Cooper: I caution the hon. Gentleman against making decisions on the basis of speculation about different alternatives. The clear view of the tripartite authorities was that there was not a viable private sector alternative, and we spent time seeking such an alternative and seeking private sector bids. However, we have not received an appropriate private sector bid that meets the terms that we require to ensure that we get a good deal for the taxpayer. It is right that we should make such a requirement. Transferring Northern Rock into temporary public ownership, by contrast, means that the taxpayer will receive any upside from a future sale of the business, which better aligns risk with reward.

John Redwood: Does that not mean that, as the business will lose money for the next three years, it will receive a Treasury subsidy to compete against others in the market that will not have that luxury?

Yvette Cooper: Once again, I have to remind Opposition Members that the decision that they supported in the autumn to support Northern Rock through Bank of England loans and Government guarantees exposed the taxpayer. Those decisions were supported by hon. Members at the time, and there are consequences that flow from that. As a result of those decisions at the time, it is important to ensure that the taxpayer's exposure is limited and their interest is protected. Opposition Members have singularly failed to make any proposal that would protect the taxpayer's interest as a result of those decisions.

John McDonnell: We have heard a lot about the taxpayer's potential losses, but before my right hon. Friend concludes will she say something about potential job losses? We understand that 2,000 jobs are at stake. From the evidence available to the Government, are wider job losses possible, or are we consolidating at this point in time? She mentioned responsibilities, so would she comment on the responsibilities of the previous chief executive and the directors? The chief exec, we understand, is to receive a payout of 750,000, despite the folly of the investment strategy that he pursued that resulted in significant job losses.

Yvette Cooper: My hon. Friend makes an important point. The proposals set out in the business plan are for the contraction of the overall Northern Rock business, returning it to its more modest roots and putting it on a more sustainable footing. As a result, it is proposed that staffing should be reduced by about a third. We have had discussions with One NorthEast, and Northern Rock has had discussions with Unite trade union, to consult on job losses and make sure that people receive proper support to find new jobs. There are vacancies in the financial sector in the north-east, and it is important, when there are job losses on such a scale in a particular area, that serious support is available to help people find new jobs. Had we not stepped in in the autumn, which was the right thing to do to protect the financial stability of the banking system, we would have seen job losses across the board. We would have seen Northern Rock go under, so it would not have continued to be a significant employer in the north-east. The business plan envisages that Northern Rock will continue as a significant employer in the north-east, with a viable future for the operation.
	My hon. Friend also raised the issue of remuneration. He will appreciate that it is not for the Government to set the remuneration of banks. The remuneration of the previous chief executive was set while Northern Rock was in the private sector. However, my hon. Friend is right that staff, depositors and shareholders will all look at those arrangements with some concern, and he is right that remuneration committees in future should reflect on those arrangements.
	Opposition Members have proposed a series of alternatives and it is right to consider them seriously. However, it is also right to point out that at no stage have the Opposition suggested how any of them would work in practice. They proposed putting Northern Rock into administration. That would have made it impossible to reconstruct the bank. It would have triggered insolvency processes, depressed the price that would have been obtained on any sale of assets, and forced the sale of assets into a market in which a credit squeeze is continuing. It would not have been a good deal for the taxpayer.
	The Opposition say that the new powers proposed under the special resolution regime should be used. Those powers do not yet exist and Northern Rock needs to be dealt with now, not in 12 months when a new banking Bill has been introduced. It needs to be dealt with now. That, in the end, is the problem with Opposition Members. They will not face up to the consequences for Northern Rock, which need to be dealt with now. They hop about from one position to another. None of them makes sense. How on earth can they promote financial stability in the banking system when they cannot establish stability even in their own policy?
	Northern Rock got into trouble last year as a result of its business model and the serious turbulence in the financial markets at the time. The Bank of England and the Government stepped in. Now we have to see it through. Temporary public ownership was the right decision for the taxpayer, for financial stability and for consumers. It has provided Northern Rock with the chance to restabilise and to restructure itself at best value to the taxpayer so that it can be returned at the earliest possible opportunity to the private sector. The decision to bring Northern Rock into temporary public ownership was the right way to meet the objectives that we set out, and right for financial stability for the taxpayers and consumers. The Opposition were wrong to oppose it and they would be wrong to vote against the transfer order today.

Vincent Cable: I shall not repeat all the arguments about the history of the nationalisation of the bank, which we have heard several times before. I simply reiterate our basic position. We believed from the outset that temporary public ownership was necessary and inevitable once the Government had made large-scale loans and guarantees, and it was certainly preferable to a bad private sale, which is what was on offer.
	On that point, I noted from several interventions from those on the Conservative Benches flattering reference to the Bear Stearns arrangement as a private sector solution. It was not a private sector solution at all. It is underwritten by $30 billion of American Government guarantees. What was impressive about it was the speed with which it was negotiated, but it was a public sector solution to a private sector problem and it remains so, albeit under private ownership. If people are looking to the United States for inspiration, the extent of the taxpayer commitment in the United States in underwriting mortgage securities is far greater than any that has been undertaken in this country. We can admire the speed with which the crisis was handled, but let us not try to pretend that it was in any sense a private sector solution. It was not.
	Because of the time constraints and because we have been over the historical ground before, I shall pick up a few points that are relevant from today's information from the accounts of the company, and make some reference to the business plan, which we have in rather skeletal form, and some brief reference to the quality of the assets of the company. I agree with the point that the hon. Member for Fareham (Mr. Hoban) made. I have for a long time shared his doubts about the quality of the loan book. Now we are hearing anecdotes about it, although we have no hard and fast evidence on that subject.
	One thing to emerge clearly from the balance sheet is the very rapid expansion of lending last year, from 87 billion to 99 billion. We now have that in black and white. Much of it was undertaken in the earlier part of last year; there was a rapid spurt in mortgage lending growth at the approach to the peak of the market. That, of course, is the source of all the problems that the bank subsequently got itself into.
	There is a link between that and the issue raised by the hon. Member for Hayes and Harlington (John McDonnell) in an intervention about the remuneration of the senior executives responsible for that spurt in lending, which was the source of the problem. I note that the accounts refer to the fact that Mr. Applegarth's payments are substantially less than what he would otherwise have been due on the termination of his employment. I would love to ask him what on earth he would have been paid if the thing had turned out wellhe has got 750,000, plus a cheap loan, plus a 2.5 million pension pot as reward for failure of the most abject and embarrassing kind. The Minister is right: not a great deal can be done about something that was undertaken when the bank was under private ownership and that is now subject to contractual arrangements. However, it sends the most appalling signalnot just to the work force, but to the shareholders who have lost everything. We need at least to record that.
	The other thing that the balance sheet brings out is the size of the Bank of England loan, which is 28.5 billion. It is the first time that I have seen the figure in black and white. One of the problems has been that in the past we have had to deduce the figure indirectly from the accounts of the Bank of England. It is very odd that the Bank refuses to disclose that important information and that we have eventually got it in precise terms from the balance sheet of the company. That is an odd approach to freedom of information, and I hope that it will be rectified.
	The other issue, which has already been touched on several times, is the profit and loss account, the summary and the operating and financial review, and the deterioration that took place between the 626 million profit and the 167 million loss. Several items are worth commenting on. For the most part, we are talking about exceptional items. There is a very large sum127 millionfor non-recurring administrative expenses, and a large chunk of that is for professional fees. I do not know whether the Chief Secretary is responding to the debate, but if she is, will she explain the process by which the professional fees of the lawyers and advisers have translated through to the bank?
	As I understand it, the Treasury was given bills of about 75 million from the various bidding partiesGoldman Sachs and others. Some of those have been accepted and some rejected, but it seems that as much as 50 million may well have made its way to the company. It would be useful to have some reassurance that the more outrageous claims have been pruned outbecause some of them were outrageous. The largest quantitative sums were the impairment charges, which were 658 million. That sounds like an awful lot of money, but it is a great deal less than 1 per cent. of the assets. Given the doubts that are now beginning to creep in about the quality of the assets, the figure strikes me as conservative rather than very large.
	A second set of questions relates to the business plan. The hon. Member for Fareham made the right points on that: there is clearly a tension between the attempts to get taxpayers' money back as quickly as possible and preparing the company for eventual sale. If the two objectives are not in direct competition, they are certainly in tension. I understand that the current management are redeeming mortgages and realising cash from that, and also trying to sell them on to other banks; inevitably, the better-quality mortgages are being sold on. That raises the issue of whether the latter stages of the repayment of the taxpayer will be achieved. The question that we need to answer is about not merely whether there is a general commitment to repay the taxpayer by 2010, but what the specific staging posts are, and how much we can expect to be repaid and when.
	The third set of points relates to the quality of the assets. My understanding of this has advanced a little since our previous debate, much of which centred on Granite. There was concern that the Granite mechanism potentially transferred into the Granite vehicle the bank's better-quality mortgages. When I talked to the new chairman about thisI think it is public knowledge and I am not breaching any confidentiality in the conversationhe sought to reassure me that there is a computer model at the bank that ensures that the mortgages that go into Granite are chosen entirely at random, so they are a mixture of good and bad. If so, there may well be problems with Granite but they will not result in the sort of cumulative impairment that we were worried about. None the less, there are clearly problems with many of the mortgages that were advanced last year, and I would expect the repossession problem and the difficulties flowing from that to get progressively worse over the next year or so.
	Let me say a little about a controversial matter. Several of us have had e-mails during the day from shareholders who see this transfer order as a mechanism for raising again the issue of compensation. I support the Government's view that the argument that there needs to be some kind of fair settlement in the direction of generous compensation is unrealistic. The simple fact is that the valuation of the shares before nationalisation was based almost entirely on artificial Government support, and it is unrealistic to expect substantial compensation in those conditions. The hon. Member for Fareham talked about the helpful certainty of the Bear Stearns compensation. I am sure he followed that as closely as I did, but my understanding was that the shareholders were offered about 2 per cent. of the value of the shares and, after a lot of negotiation over a two or three-day period, that was increased to about 10 per cent. However, it was virtually wiped out. It is unrealistic and unfair to imagine that such rescues can be accompanied by generous compensation of shareholders.
	Last week, we had an indication of continuing problems in the financial markets. This is clearly not just a Northern Rock problem; many of the other banks are rocky as well. As has happened in the United States, we will get continuing pressure from the rest of the banking system for the public sector to take over the risks and for it to retain the potential upsides of any improvement. The Governor of the Bank of England is under a lot of pressure from the City and financial commentators to take over poor assets and poor mortgages in return for liquidity. He is absolutely right to take a strong line on that. I believe that the Bank of England's position has changed slightly and it is now willing to accept mortgage assets in return for liquidity while insisting that they are of very high quality.

Jim Cousins: rose

Vincent Cable: I am just drawing my remarks to a conclusion.
	The Governor is absolutely right to defend the public interest, which goes much further than the narrow issues of Northern Rock.

Richard Spring: This afternoon, there was an announcement on the home page of the Northern Rock website saying:
	Due to essential maintenance, access to our Tracker Online and Silver Savings Online services will be unavailable between 20:00 and 21:00 hours today, Monday 31st March. We apologise for any inconvenience this may cause.
	We can only hope that that was not a bad omen of what lies before us. It does not bode well on the very day that Northern Rock is putting its best foot forward, announcing its business plan and setting out its future, with much publicity surrounding its full-year results for 2007.
	In view of Northern Rock's declining mortgage book, the order before us deals with the transfer of shares to the Treasury solicitor, the possible hiring and firing of directors, and administrative changes surrounding shares. I want specifically to consider the regulatory aspect of this exercise, because that is at the heart of the problem. Section 2 of the Banking (Special Provisions) Act 2008 requires the Treasury to consider the desirability of making the order for two reasons. The first is to protect
	the public interest in circumstances where financial assistance has been provided by the Treasury to the deposit-taker for the purpose of maintaining the stability of the UK financial system.
	The other is to maintain
	the stability of the UK financial system in circumstances where the Treasury consider that there would be a serious threat to its stability if the order were not made.
	That is the exact point made by the Chief Secretary, and it is the heart of what is before us this evening.
	In a letter sent to MPs by the chief executive of the Financial Services Authority, the internal audit identified a number of key failings. Before we can agree to any order, therefore, we have to be satisfied that the arrangements will be satisfactorily monitored by the FSA. I should add in passing that Northern Rock will not be a publicly owned company for the purposes of the Freedom of Information Acta key element in the whole Northern Rock picture. After the regulatory failure of Northern Rock as a public company, is the Minister satisfied that there the FSA will adequately resolve that issue with regard to Northern Rock in its new state? It is worth remembering that the reliance on wholesale markets helped to bring Northern Rock down when banks became reluctant to lend to each other.
	The interest rate offers on the website that I mentioned are pretty generous. Despite the modifications to the business plan, we must consider what is happening in the marketplace today. For example, LIBOR, which is the interbank lending rate, is back over 6 per cent.its highest level since 27 December. That indicates the real nervousness among financial institutions, despite the additional liquidity provided by the Bank of England. In the build-up to the situation that confronted us, we saw the failure of the tripartite system introduced by the Prime Minister. Given the poor regulatory performance of the FSA, what assurances can we get that it will meet regularly and monitor lending and borrowing practices carefully? Given the clear illiquidity I referred to in the wholesale marketsand there is real pressure out therewill the FSA work closely with the Bank of England? There is no easy divide between liquidity, compliance and solvency. Last summer, the FSA presumed that the Bank of England would provide sufficient liquidity to bail out failing banks. We have to see the order in that context.
	As far as Bear Stearns is concerned, it is not a question of it being some sort of pure exerciseI refer to the comments of the hon. Member for Twickenham (Dr. Cable). Of course, a credit facility was provided by the Federal Reserve, but the real point is not so much the way in which Bear Stearns was handled by the Federal Reserve, but the speed of the action. That was the key.

Doug Henderson: I went through the argument about Bear Stearns with some of the hon. Gentleman's colleagues earlier. Is he arguing that a Conservative Government, had they been in place last September, would not have made every effort to explore a private sector solution to the problems faced by Northern Rock? If he agrees that they would have done that, does he accept that it would take time to work through such an option?

Richard Spring: Of course, the Bear Stearns exercise was encouraged and helped by the Federal Reserve, and I know that the hon. Gentleman would agree with me about that, but the point is that the process took place very rapidly. Let us remember the situation in which we found ourselves. There were queues of people outside the banksit was a terrible indictment of our financial services industry. Of course, the Americans, seeing the potential for equivalent disasters in the United States, moved very quickly to ensure a private sector takeover of Bear Stearns with the support of the Federal Reserve. The point for us to consider when comparing Bear Stearns with the fiasco of Northern Rock is simply this: it is impossible to discern, because we cannot get a clear answer, what the Lloyds TSB offerings happened to be. However, we know enough to know that something could have been worked up to ensure a satisfactory takeover, but something called the general election intervened. I fear that the decision was ultimately political, and its consequences have been the dithering and backsliding of the past few months, which have had a devastating impact on the reputation of our financial services industry.
	The order demands assurances on transparency and good management. Northern Rock made a great impact on the reputation of our financial services industry and our regulatory oversight. The price to earnings ratio of UK domestic banks is now the lowest in Europe. The market is taking a view of us and our country, even though the financial services industry in this country is probably the most important such industry, relatively speaking, in Europe. That view flows partly from the Government's incompetence and their handling of Northern Rock.
	The solution had better work this time. However, I am afraid that, given the way the Government handled the issue, we can have little confidence that a Government so marked by indecision and procrastination, perfectly illustrated by the Northern Rock fiasco, will ever enjoy the fullest confidence of the banking and financial services industry in this country or internationally again.

John Redwood: It was a great pity that the Chief Secretary decided to devote so much energy to rather silly and clumsy partisanship and to claiming that we do not have any better ideas about how to tackle the position, instead of doing what the House expected of her and telling us a little about the challenges and difficulties that lie ahead if the business stays in the public sector. It probably will if we are unsuccessful in persuading the Government otherwise.
	The Chief Secretary constantly asks, What was the other option? There was an easy other option, for which I have argued throughout the crisis, from when it broke in the summer. Of course, the Bank of England had to step in when there was a run and act as lender of last resort. However, the Bank of Englandand, if necessary, the Treasury, working with itshould subsequently have been the intelligent bank manager of the business. It had a natural relationship with Northern Rock as its banker.
	As a banker, it could have taken all the collateral it needed to ensure that taxpayers' money would never be at risk. It could have guided and influenced the business plan so that it had an impact on phasing the repayments and the way in which they would be made. It did not have to take over the bank's ownership, with all the other liabilities and risks. It did not have to take responsibility for the staff or future trading. It should have concentrated on lending the least amount needed to get the bank through the immediate problem, and having the best possible security for the taxpayer and the best possible supervision and management overlooking the board, as a bank manager should do, to ensure that the money would be repaid in good time. That was the obvious thing to do.
	The problem with the current model is that the Government are trying to do two contradictory things. Of course, the Chief Secretary is right to tell the House that she views getting back the 24 billionthe remaining outstanding loan, we were told tonightas an urgent priority. I suspect that she can do that and I wish her every success. We all represent taxpayers and it is important that we get the money back. It is also important that the Bank of England gets its money back as quickly as possible because it is a small bank trying to deal with a large and complex system. All the time that it is so committed to Northern Rock, it does not have the firepower that it needs to deal with the obvious imperfections and difficulties in the money market.
	How can we get the money back? The Government and the bank's recently appointed management admit that the money will be repaidwe trust in reasonable timeby squeezing the business, perhaps halving it, getting people to repay their mortgages early because they remortgaged with someone else and making sure that new advances are not made through Northern Rock to replace advances that are maturing as people pay them off, so that business can be transferred to other organisations in the financial world, and some of the assets can perhaps be sold on, as appropriate.
	That is a perfectly good working model for getting the Treasury money back, but it is not what the owners of a bank would be doing if they were trying to sell it on to someone else for maximum value. Indeed, doing so will diminish the value of the assets under control, because the bank will have to battle constantly to cut its costs, by sacking its staff and reducing its administrative overheads, to bring it closer to the reality of the falling revenue. Instead of having one or two years of rising profits before returning the business to the private market, which would be best for securing a good price, we have been told tonight that it will definitely have three years of losses. We know, too, that it will have a much smaller business, so it will be quite difficult for it to explain how it can suddenly turn all that round.

Jim Cousins: Does the right hon. Gentleman accept that the logic of what he is saying points to a longer period for the repayment of the bank's loan than the period to 2010 and to putting less pressure, by the reduction of business, on the rest of an already struggling mortgage market?

John Redwood: I do not think that the circle can be squared. If the loan were made permanent for, say, 10 years, it would give the business more chance, but there would then be enormous competition issues with the European Union, which might prevent it from exploiting that chance. Indeed, my next point is that given that the Government are forecasting perhaps three years of quite serious losses, they will have to argue hard to our bosses in Europe that they are not making a direct Treasury subsidy to allow unfair competition, even though the business is slimming itself down.
	My hon. Friend the Member for Fareham (Mr. Hoban) has already put his finger on the issue, which is that although it would be quite easy to defend ourselves against a charge of anti-competitive practices in making new advances, because the business would be shrinking its advances portfolio, it would be more difficult to defend against that charge on the deposit front. I looked at the Northern Rock site today, as many others preparing for this debate no doubt did too, and saw offers of 6 per cent. with the full Treasury guarantee. That seems a pretty attractive rate, but a justification will need to be made to the competition authorities in Brussels if such rates are supported by direct Treasury subsidy, because the company is a loss-making business offering those rates to collect capital to replenish its capital base.
	We have a business with two conflicting aims. I trust that the repayment of the moneys will be completed before the next general electionit would be a neat order to do sobut the Government will then have a weakened, loss-making business with far fewer staff and an unpleasant impact on the north-east, which is one of the tragedies of the situation that they have created, that will be quite difficult to return to market for a sensible price. Ministers must accept that they are responsible not just for getting back the 24 billion that has been lent, but for getting a fair value for the assets that they have taken over, rather than going through three of four years of writing them down, showing that they are impaired, losing lots of money on them and ending up with a second set of losses for the taxpayer, in addition to the running annual loss that will have to be paid for out of taxpayers' money, as the Chief Secretary knows but will not admit, because once someone owns 100 per cent. of the shares, they are clearly responsible for paying the losses.
	There are other oddities. It is interesting that Northern Rock appointed new non-executive directors on 90,000 a year, plus 10,000 for every committee, shortly before the nationalisation went through. Will that become the standard level of remuneration for such posts in the public sector, or will an attempt be made to bring Northern Rock into line with the more normal public sector levels? That is an issue for Ministers, who have naturally been telling the public sector that they want good wage and salary control, because they are worried about the inflationary effects of doing otherwise.
	One interesting point to emerge in the business plan is that there is to be a continued transfer of new money into the Northern Rock Foundation. We have been promised a minimum of 15 million, but we have to ask whether that has been through the proper public expenditure assessment processes and whether other parts of the country would be eligible for such treatment, as we are now talking about a public subvention to a particular part of the country for particular purposes.
	If Ministers are to have their way in the Division, as they often do, what we need above all is a bit more explanation of how they will satisfy themselves that Northern Rock's business plan will lead in due course to resale to the private sector on terms that are satisfactory to the taxpayer, and how they will satisfy themselves that they can do that without falling foul of competition rules, while still getting the repayment within a reasonable period. I think that they have set themselves an impossible task.
	Ministers are in this situation because they dithered and made mistakes at every twist and turn of this awful story. They did not keep markets liquid enough in the summer to head the problem off. They did not understand how to organise a lender of last resort, in secret or with the involvement of all the banks, so that there was no great shock to Northern Rock that brought it down. They delayed when the run on the Rock began, and greatly increased the cost of the rescue by not making an immediate statement, as they should have done. They spent too long lecturing banks for making all sorts of mistakes and not enough time understanding that there was a crisis in the credit markets, and that bad credit and good credit were both going down at the same time in a way that would undermine good as well as bad institutions. They delayed too long when trying to put together a private sector bid, even though many people told them that that was not likely to be productive, given the delays and difficulties that the Government faced.
	The Government have come up with the worst of all possible worlds, which is to nationalise all the assets and liabilities of Northern Rock. I fear that those in the north-east will grow to dislike the policy because it will mean redundancies, closures and a squeeze on the bank, and I fear that taxpayers will come to loathe the policy because it will mean endless losses and a very bad final result if the Government try to sell the bank.

Philip Dunne: It is a great pleasure to follow my right hon. Friend the Member for Wokingham (Mr. Redwood), whose closing remarks form a prcis of the calamitous state of affairs regarding the nationalisation of Northern Rock that economics students will, in years to come, turn to first to get a proper understanding of what went wrong. The Chief Secretary to the Treasury has unfortunately again left the Chamber. It seems to be becoming a habit that whenever I stand up she goes off, perhaps to get help. I shall start my remarks by explaining to her colleague, the Exchequer Secretary to the Treasury, why the parallel with Bear Stearns is so pertinent; Ministers seem to have failed to pick up on that. I am pleased to see the Chief Secretary return. I should tell her that I am trying to explain why the parallel with Bear Stearns is so clear and direct.
	Last August, the financial authorities were made aware of the problem with Northern Rock and tried to put together a private sector rescue. They received an indicative proposal that was dependent on substantial, Government-guaranteed financing. If the authorities had sat round a table in the same room as the financiers, just as Secretary Paulson did with JPMorgan Chase, a deal would have been done over the weekend, and the Government would have avoided all their subsequent problems. It is for the Government to reflect on why that did not happen, and to repent for years to come.
	I should like to pick up on one or two of the revelations in Northern Rock's annual report and business plan, published today, which allow us a glimpse of why the Government were so reluctant to disclose what is happening in the bank. Consistently over a periodever since he first discussed the issue with usthe Chancellor has told the House and the public at large that he is confident that Northern Rock's asset book is good, and that Northern Rock was solvent. He was confident about that because he had been told by the Financial Services Authority that that was the case. One of the final notes of the accountsnote 41(B) on capital management, on page 99says that on 19 April 2007, the FSA was told that
	Northern Rock's regulatory capital was below the capital requirement imposed by the FSA by 85.5m.
	As long ago as last spring, months before the problems emerged in the credit markets, the FSA was aware that Northern Rock was operating outside its capital regime. However, it did little about itso little, indeed, that despite its having identified Northern Rock as one of the so-called high-impact firms, its regulatory regime was so lax that its own internal review, published last week, describes it as being
	at the extreme end of the spectrum
	of regulation.
	The FSA's decision that, alone among 38 high-impact firms, Northern Rock did not need a risk mitigation programme implies considerable scrutiny during close and continuous meetings. However, it is clear from the FSA's commendably frank and candid appraisal of its own performance that the number of such meetings held by the FSA in the three years from 2005 until 2007 amounted to none in 2005, one in 2006 and seven in 2007. Of the seven, five took place on the same dayI would describe that as a single meetingand two took place by telephone. I calculate that that represents an average of less than one day of meetings per year during the three years in which Northern Rock was supposedly a high-impact firm. The organisation in which the Chancellor has placed such confidence said repeatedly that Northern Rock was a good bank, solvent and with good assets. It beggars belief that the Chancellor can have placed such trust in the regulator, given its performance over that period.
	Let us examine the asset quality revealed elsewhere in the accounts, which has already been mentioned by other Members tonight. A most revealing statistic is the proportion of residential mortgagesthe primary and most secure category of assets held by the bankwhich are at the
	extreme end of the spectrum,
	as the FSA put it. Page 92 of the annual report reveals that in 2006-07, the proportion of mortgages with a loan-to-value ratio in excess of 100 per cent.in other words, the loans were greater than the value on which they were securedrose from 110 million, in round figures, to 432 million. That 432 million is now guaranteed by the taxpayer, although the company itself admits that the loans were greater than the security on which they were pledged. As for the second-worst-secured assets, those with a 95 to 100 per cent. loan-to-value ratio, the figures are remarkable. Since the end of 2006 the amount lent increased from 2.1 billion to 4.1 billion, an increase of 2 billion.

Jim Cousins: I happen to have the table in front of me. Does it not also show that the best-quality mortgages, those with a loan-to-value ratio of less than 70 per cent., rose by a figure three times as great as the one that the hon. Gentleman has given?

Philip Dunne: I readily agree that the overall book has increased substantially, which means that all categories of loan have increased. My point is that the risk of the book has increased significantly over the yearand this is the book that the Chancellor keeps telling us is of very high quality. The least-high-quality lending has risen by nearly 2.5 billion, and that is the part that is most at risk, not least given what is happening in our present housing market.

John Redwood: Perhaps my hon. Friend will remind Labour Members that there are a good many unsecured loans as well. People were being lent 125 per cent. or so of the value of the houses involved, including the top-up unsecured loans, and I believe that the 2007 accounts show particularly large increases in provision against those unsecured loans.

Philip Dunne: I am very grateful to my right hon. Friend for reminding me of that. Indeed, the unsecured lending book is of the order of 7.7 billion as at the end of 2007, and the impairment charge was in excess of 200 million, much of which was secured against that portfolio.
	Hometrack, which provides one of the widest analyses of the housing market, published some statistics today confirming that we have entered the sixth month in a row of declining house prices. The increase in high-risk residential mortgages places a sharper focus on the Chancellor's confidence that the book will be good and that taxpayers' money will be secure. I wish I could share his confidence.
	In an earlier discussion of the possible consequences of administration, the Chief Secretary referred to its leading to fire sales of assets. Of course, we have been in a state of uncertainty over this company since mid-September, and the company has successfully sold a portfolio of assetsits commercial loansfor a premium over the book value at a time of considerable uncertainty for the company as a whole. That firmly demolishes the argument that an administration would have somehow made it more likely that losses would have been incurred on the sale of the loan portfolios. Good assets will sell for a good price in these circumstances irrespective, as has just been proven, of whether the company is in distress.
	That brings me on to my main point, which also comes out of a reading of the accounts. Much was made in earlier debates about Granite of whether or not the business plan will feed the beast. Enough has already been said about that this evening. However, Northern Rock established another financial vehicle, which has not been referred to in previous debates. I refer to the Saphir Finance vehicle, a special purpose vehicle, which issued 400 million in tier 1 notes; they were issued against the 400 million of preference shares issued by Northern Rock. The preference shares were provided as collateral to the holders of the notes issued by Saphir Finance.
	The preference shares in Northern Rock, given that they are preference shares, rank ahead of all the ordinary shares, including the ordinary shares to which the foundation trust shares will be converted through the transfer order. Oblique reference is made in the order to the preference shares, but I would ask the Chief Secretary, even in the few minutes remaining in our debate, to help us to determine whether in the compensation payments made to shareholders of Northern Rock, if there are any, the Government will observe the traditional capital ranking rights of securities and ensure that preference shareholders are paid out in preference to ordinary shareholders. I am not sure whether she is able to give us that assurance now. I am more than willing to give way to her [Interruption.] She indicates that she is not in a position to do so, so perhaps she will be kind enough to write to me [Interruption.] Once again, she is not indicating either way.

Yvette Cooper: indicated assent.

Philip Dunne: She will be happy to write to me about that. I am very grateful because the issue is causing concern outside this place. Given the lack of information about how the Government intend to implement the transfer order and compensate shareholders if any compensation is due, if the Government choose to ignore the standard ranking of securities, it will blow another hole in the confidence of financial institutions in the Government's respect for the ordinary workings of the market. I am not arguing that preference shareholders should necessarily receive anything, as that will come down to a judgment on what compensation should be paid at all; but if any compensation is due, it is due first to the preference shareholders, and if that does not happen, I would urge the Chief Secretary to think very carefully, as it will raise ripples right across the financial sector. The House will be pleased to hear that that brings me to my final point.
	My right hon. Friend the Member for Wokingham asked a question about the business plan objectives that are set out quite succinctly in the annual report, both in the executive chairman's statement and in the operating financial review, where the company's objectives are referred to as, first, the repayment of the Bank of England debt; secondly, the release of Her Majesty's Treasury's guarantee; and, thirdly, a successful return of the company to the private sector. Where within those objectives sits the priority donation out of incomeby the way, the company is generating none at the momentof 15 million to good causes? Of course, we would all like to give plenty of money to good causes, but it is not within the company's objectives. The company is not generating a profit at the moment, so out of what pot of reserves will it make such a payment for 2007 and subsequent years if profits are not made?

Doug Henderson: Perhaps the hon. Gentleman could make it clear whether the Conservatives' position is that those moneys should not be made available to the Northern Rock Foundation. If so, does he recognise the consequences for many causes in the north-east? Does he also recognise that making those contributions might well be a pretty clever marketing stroke on behalf of Northern Rock, on whichever constitutional basis it is formedcurrently under the public sector?

Philip Dunne: I understand the hon. Gentleman's enthusiasm for spending money in his region, but that is not the point. I am trying to make a point not about whether a company should distribute money that it does not have, but about the fact that the Government have made a determination that Northern Rock, which is being nationalised and is owned by the Government, will make that paymentbut from where? It must come from the taxpayer in the first year, because the company is not generating the profit that it would have distributed under the previous arrangements.
	In conclusion, I urge the Chief Secretary to think again, before we vote on this issue, about whether or not the Government are really in a position to allow taxpayers' money to be put at risk in the way that they have. I urge her to think again about the prospect of introducing a banking reform proposal that would have allowed an orderly administration to take place under Bank of England supervision, which is what will happen if another bank gets into difficulty next time.

Mark Hoban: We have had a very full debate on the order. I was a little disappointed in the Chief Secretary's speech. I expected that she would set out very clearly the rationale for the Government nationalising Northern Rock, that there would be some substance to her arguments and that we would not have to rely on the vague assertions that this represents a better deal for the taxpayer, without some information to prove that that was so. She gave us no comfort on the quality of assets that the taxpayer will acquire. Northern Rock's payment ratios are deteriorating faster than those of the industry as a whole. She gave us no comfort that taxpayers would get all their money back. She said that this was the best deal possible, without providing the substance to demonstrate that it is the best deal possible.
	On the specific losses that Northern Rock will incur in 2008, 2009 and 2010, despite being presented with the opportunity to give the House the figures, the Chief Secretary sought to avoid giving the House and the taxpayer that information, despite the fact that the Treasury must know what the figures are. The Treasury has access to all the financial information that supports the plan, and I am disappointed that she chose not to share those figures with the House, because that indicates that a significant loss could occur over the next three years. Ron Sandler refers to a substantial loss. The taxpayer would be right to be concerned about their exposure as a consequence of the transfer order before us. The Chief Secretary talks about there being no alternative, but the reality is that the Government have yet to prove the case for nationalisation, have yet to make the substantive arguments that this House deserves to hear, and have yet to be fulsome in disclosure of information about Northern Rock's financial position in their forecasts and projections. They are just hoping that the money will be repaid by 2010. Even Ron Sandler is not giving Northern Rock customers that same degree of assurance.
	That is why we will pray against the order. We believe that the taxpayer has been exposed to significant risk as a consequence of the way the Government have handled the fallout from Northern Rock, and the Northern Rock situation over the past six months. The taxpayer deserves better answers than they have had tonight from the Chief Secretary.
	 It being one and a half hours after the commencement of proceedings, Mr. Deputy Speaker  put the Question , pursuant to Standing Order No. 16 (Proceedings under an Act or European Union Documents) and Order [26 March.]

Mr. Deputy Speaker: I think the Ayes have it.

Hon. Members: No.
	 Division deferred till Wednesday 2 April, pursuant to Standing Order No. 41A (Deferred divisions).

DELEGATED LEGISLATION

Mr. Deputy Speaker: I propose to put motions 4, 5 and 6 together.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Taxes

That the draft Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008, which was laid before this House on 20th February, be approved.

Companies

That the draft Companies Act 2006 (Consequential Amendments etc) Order 2008, which was laid before this House on 27th February, be approved.

Sex Discrimination

That the draft Sex Discrimination (Amendment of Legislation) Regulations 2008, which were laid before this House on 6th March, be approved. [Steve McCabe.]
	 Question agreed to.

PETITION

Perry Family (Citizenship)

Frank Cook: Being cognisant of the need for brevity as there is an important Adjournment debate to follow, I shall simply tell the House that the petition I seek to present this evening relates to the Perry family of Thorpe Thewles in my constituency. Mr. Perry went to South Africa many years ago and met Karen, his current wife. Having married, they had three sons and after many years Mr. Perry repatriated himself to this country, took up a secure job and established a home in Thorpe Thewles, and was joined by his wife who, sadly, did not take care of her travel documents and was then considered to be out of time as far as immigration status is concerned. This is an example of the triumph of bureaucracy over common sense or the formulation of arid regulation without any degree of human compassionor perhaps if Mrs. Perry had been born fleet of foot and had expressed a wish to represent England in the Olympics and change her name to Zola Budd, it might not have been necessary for me to present this petition.
	 Following is the full text of the petition:
	 [ The Humble Petition of Marcus, Cain-Dean and Joshua Perry and others undersigned hereon,
	 Sheweth
	 That they are against any law that discriminates against long standing and successful marriages of over 20 years, where a British citizen is forced to be apart from their chosen spouse.
	 Wherefore your Petitioners pray that your Honourable House urges the Government to reflect over the case of the Perry family and allow Karen Perry to enjoy legal status within the United Kingdom and enjoy family rights as should her sons and husband.
	 And your Petitioners, as in duty bound, will ever pray, c. ]
	[P000161]

MS DEBORAH PHILLIPS

Motion made, and Question proposed, That this House do now adjourn. [Steve McCabe.]

David Davis: The outcome of this debate will decide whether an elderly constituent of mine, Betty Phillips, will spend her remaining years supported by the love and care of her daughter and granddaughter or separated, lonely and at risk.
	The issue that I wish specifically to address is the prospective deportation of Deborah Phillips, the daughter of my constituent, Betty Phillips. That deportation is a matter of weeks away if the Minister does not use his powers to act. Let me start by describing Deborah and how she came to be in the position she is in today. The story starts when Betty, Deborah's mother, falls in love with a sailor in the US navy, a world war two veteran, when he is on shore leave in Hull. They then get married, and go to live in America, where they live on a variety of military bases. Deborah was born in 1959 and her brother David was born in 1962. In 1963, the family returned to Hull. Mr. Phillips, who was an American citizen, got indefinite leave to remain in the UK, as did their children, and he took a job at the university, where he stayed until he retired in 1992.
	Deborah grew up in, and was educated in, Hull from the age of three. After leaving school, she worked in Hull city council's offices until she was 21. She then joined the US navy, where she remained until she retired. Her US navy record always showed her home address as England. During the period between 1981 and 1990, on returning to the UK her passport was variously stamped first, Indefinite leave to remain and then, Allowed to enter for six months. She wrongly assumed the latter to be a mistake. That was an error on her part, but one that was encouraged when her new passport in 1990 was once again stamped, Indefinite leave to remain. She knew that she would have to get the stamp issue resolved, but assumed that that would be a simple administrative issue. She had never had any trouble returning to England, and, despite her American citizenship, thought of herself as English. That is hardly surprising, given that she had grown up in England. The issue did not strike her as importantwrongly, of course.
	It is true to say that at that point the needs of her parents were not pressing, but in 2003, her father was diagnosed with Alzheimer's disease and she returned home to Hull to help her mother care for him. By then, she had a daughter of her ownAlexandra. Deborah helped her mother to nurse her father until he died. After he died, the family went on holiday together to Corfu in June 2005. On re-entering the UK, she was told that she did not have leave to remain and that she had two months to rectify the problem. She was told at that point that indefinite leave to remain ceases after two years outside the UK, but she had been provided with no previous advice on this either from the Home Office or at any time after she had re-entered the UK.
	From that point on, Deborah started a series of applications to obtain indefinite leave to remain in the United Kingdom, the first of which was in August 2005. She was told that it would take three weeks, but instead it took seven months. As the Home Office retained her passports, she was also unable to return to America to bury her father's ashes in Arlington national cemetery. At the end of the seven months, her application was refused and she was told to leave the country.
	Deborah made her second application from America, and then returned to Britain to return her child Alexandra to the school in Hull to which she was accustomed. After that application failed, she and her daughter were in effect deported. Her third application was also turned down. She stayed in America between May 2006 and June 2007, where she and her daughter lived from motel to motel. They had no particular place in which to live. Her mother, Betty, had to go out to America in July 2006 for a surgical operation because she had nobody to look after her here in Britain. In June 2007, Betty fell ill with a series of mini strokes and so Deborah rushed back to the UK on a military flight.
	Let us be clear that Betty Phillips is 80 years old, and although she is a robust Yorkshire lady in many ways, she is physically very frail, and is in constant need of help. As each month passes she, of course, grows more fail. From Deborah's arrival in Britain last year, there have been a series of stays of deportation, the latest of which runs out in some weeks' time. We are now in a position where a daughter of my constituent, who received her entire education in Hullwhose own daughter is more used to English education than any otherand who wants simply to care for her mother is on the brink of being deported. She will not be a burden on the state, because she has a pension from the American navy. She is indeed likely to save the state money, as she will be looking after her mother, who would otherwise be dependent on state care. She will create no housing pressure, because she will stay with her mother. Most importantly, her mother would not have to face the emotional agony of having her daughter and granddaughter wrenched away from her at a fragile time of her life.
	Frankly, if I wanted to score easy political points it would be too simple. I could ask why Deborah is being wrongly deported, in my view, when the Government cannot deport Muktar Ibrahim, the 21/7 bomber, or Mustaf Jamma, who has been charged with the murder of Sharon Beshenivsky. I could ask why Deborah has to be deported when the murderer of Philip Lawrence cannot be. I could list rapists, murderers and terrorists galore whom we cannot deport, while the daughter and carer of my 80-year-old constituent cannot stay.
	Those questions were certainly put to me by Mrs. Betty Phillips, and they are questions for which I have no answer. I do not want to score political points. I have a great deal of respect for the Minister and I simply want a civilised answer that prevents this terrible prospect for Mrs. Phillips. I suspect the Minister is as conscious as I am that, whatever the technicalities, Deborah Phillips is a victim of a weakness in the law that means that someone born of a British father before 1961 has a right to citizenship, but someone born of a British mother at the same time does not have that right. That morally dubious distinction arises, I believe, from a mistake in the legislation.
	The British Nationality Act 1981 was amended by the Nationality, Immigration and Asylum Act 2002, which inserted new section 4C to correct an historical wrong and an historical discrimination. The discrimination that the amendment sought to correct was that before 1983 legitimate children born to a British mother and foreign father would not become British citizens by descent through the maternal line, whereas if they were born abroad to a father of British descent and a mother who was a foreign national, they became a British citizen by descent through the paternal line.
	Unfortunately for Deborah, the new law to correct the discrimination, that is section 4C of the 1981 Act, was limited to children born after 7 February 1961. Deborah was born on 5 November 1959. Therefore she still does not benefit from Parliament's intention to correct the historical wrong. The issue is even more profound in her case, as her brother, David Phillips, who was also born in the US, was born on 20 March 1962 and therefore qualifies to register as a British citizen. The law therefore discriminates between Deborah and her brother, even though they have the same parents, were born in the same place, and were born only two years and four months apart. That is ludicrous.
	A further policy consideration arises from the case. There will not be a large number of people in the same situation as Deborah Phillips, but a high proportion of those who are will have parents who are entering an era of frailty as they enter their '70s, '80s and even '90s. Those parents need support from their adult children.
	My request to the Minister is straightforward. First, in the legislation that he is due to introduce to the House, will he please review the operation of the law to correct the anomaly? Secondly, since any change in the law will be too late for Deborah, will he use his discretion to allow Deborah Phillips to stay in the United Kingdom? That is acutely necessary in this case at this time, since a change in the law that comes into effect tomorrowin fact, in precisely 17 minutesmeans that if Deborah has to leave the UK, she will not be allowed back in for 10 years, as far as I can tell, under any circumstances. That means that she will not be allowed even to visit her mother, whatever the circumstances, because the effect of the law is mandatory. So, no matter how ill her mother is, no matter what goes wrong, no matter what the circumstances, Deborah will not even be able to visit her.
	I repeat that my request is straightforward. We all like to claim that our preferred immigration policy is both firm and fair, but both parts are important. Policies should be both firm and fair. Let the Minister demonstrate today that he believes that too, and prevent Mrs. Betty Phillips from having to live out the latter stages of her life in loneliness and unhappiness, forcibly separated from her daughter and granddaughter by a law that was simply not thought through properly.
	The Minister is a civilised man. I hope that he will give us a civilised answer to the problem.

Liam Byrne: I am grateful for the opportunity to respond to tonight's Adjournment debate. Sometimes in debates about immigration, I think that there is a great deal of consensus in all parts of the House that is sometimes not revealed or seen in the public domain. Tonight may be another example of the consensus between us being greater than the things that divide us.
	The right hon. Member for Haltemprice and Howden (David Davis) mentioned a specific case in his constituency, but it raises wider points of policy, as he said, which will command the attention of the House both this evening and, I hope, in months to come. I thank him for the courteous and careful way in which he has made representations to me over the past few months.
	I congratulate the  Hull Daily Mail on championing the case. I have not always agreed with the direction of its editorial policy, but judging by some e-mails that I received this afternoonfrom the right hon. Gentleman's constituents, I thinktelling me that many local people disagree with the  Hull Daily Mail, it is doing something that it feels is right even if it is not popular with all sections of its readership.
	I wish to delineate two issues: the way in which decisions are made, and why they are made. Those are the wider policy issues to which the right hon. Gentleman alluded. I shall conclude by proposing a way forward. The basic chronology of the case is a matter of agreement between us. As the right hon. Gentleman said, Deborah Phillips was born in the United States and spent the first years of her life there. She came to the United Kingdom and spent a considerable period of her childhood and early adulthood here before returning to the United States. In other words, although she was educated in the UK, she built her life in the United States, in the services and then, I think, in business. I believe that her brother remains there.
	I first wish to set out how decisions are taken. It is often forgotten in the public debate that it is rarely Ministers who make such decisions. The decisions are taken by independent Crown civil servants and, often, independent immigration judges. In this case, the right hon. Gentleman's constituent failed in her appeal to the asylum and immigration tribunal in December 2006. The judge found that:
	The situation as between mother and daughter
	was not
	so exceptional that to deprive her of the right...to live with her mother would place this country in breach of its obligations under Article 8 of the Human Rights Convention.
	In reaching its finding, the AIT held that Miss Phillips's mother was financially independent and could afford to pay for her own care, that her mother had travelled to the United States in 2006 for an operation, and that Miss Phillips had a brother in the US. That is simply a summary of some of the things that the judge said.
	I do not think that when judges make decisions of such force and clarity the House would want Ministers overturning them left, right and centre. The question that we must turn to is whether the framework within which the judgment was made was not quite right, and whether justice demands a different solution. In this case, as the right hon. Gentleman set out, the question is whether the framework of the British Nationality Act 1981 and its amendments is quite right.
	Before 1983, British women were unable to pass on citizenship, but there was discretion in the British Nationality Act 1948 to confer citizenship on any minor by registration. That was why Merlyn Rees, when he was Home Secretary, said on 7 February 1979 that he would exercise discretion in favour of any minor of a UK-born mother who applied for registration before his or her 18th birthday. In other words, that concession would benefit anybody born after 1961, as long as they registered before their 18th birthday.
	In the Nationality, Immigration and Asylum Act 2002, this Government widened that concession through an amendment to the 1981 Act, which meant that people could register after the age of 18. The nub of the argument was that there may well have been children in some parts of the world who were unaware of the proceedings of the House of Commons, incredible as that might seem. New section 4C was introduced and added on Third Reading in the Lords without dispute.
	However, the problem in the right hon. Gentleman's case is that the provision does not help Ms Phillips, as she was born before 1961, in 1959. That issue was addressed by Lord Filkin in 2002, when he said:
	British women did not acquire the right to pass on their citizenship until 1983. One can only go so far towards righting the wrongs of history before the number of 'what ifs' to be taken into account becomes unmanageable.[ Official Report, House of Lords, 31 October 2002; Vol. 640, c. 295-6.]
	Any geographical or time limitation in the new registration provision would have produced hard-luck cases. At the time, the Government felt justified in drawing a line around people who, had they applied in time, would have been registered as citizens under the terms of the policy in 1979. Nevertheless, the Government accept that those born to British mothers before 1961 are at a disadvantage, so I can confirm that we shall seek to bring forward a legislative remedy at an early stage, perhaps in the immigration reform Bill we have already proposed.
	Ms Phillips is one of the hard-luck cases referred to by Lord Filkin, so the question for us is whether there is a unique combination of factors that warrants leave outside the rules. The right hon. Gentleman pointed out that there is probably only a limited number of people in that category; none the less it is important to look first at whether there are particular extenuating circumstances, and in this case I believe there are.
	Many of those circumstances could come under the existing carer's concession in the immigration rules. It allows Ministers and caseworkers to exercise discretion, and in compassionate circumstances a period of leave of up to 12 months can be granted. I think that that would be appropriate in this case because of a combination of factors that include the following: first, Ms Phillips's role as her mother's full-time carer; secondly, Ms Phillips's inability to apply for citizenship, as a result of the legislation that I propose soon to amend; thirdly, the length of time of Ms Phillips's residence in the UK; fourthly, the ties that Ms Phillips's daughter has built up during their four years' residence in the UKas the right hon. Gentleman told me last week, and confirmed today, her daughter is in school in the UK; and, finally, and perhaps most important, the news that the right hon. Gentleman conveyed to me about Deborah Phillips's mother's condition and the role that Deborah Phillips wants to take as her carer.
	The combination of those factors points to a requirement on me to exercise discretion in this case, so it is appropriate to grant leave of 12 months, exceptionally, outside the rules.

David Davis: As the hon. Gentleman is clearly moving towards the solution I was hoping for, I take this opportunity to thank him for being as civilised and thoughtful as I always thought he was.

Liam Byrne: The right hon. Gentleman is very kind. I thank him, too, for the way in which he presented the case to me and for his efforts to draw the wider issues to the attention of the House.
	Finally, I wanted to give a pointer either to my work in the future orwho knows in this job?perhaps the work of my successor. It is perfectly possible that the 12 months' leave that I think I am able to grant will expire before the immigration simplification reforms that we shall propose are on the statute book, in which case I think it would be appropriate to extend the leave again.
	 Question put and agreed to.
	 Adjourned accordingly at s even  minutes to  Twelve o'clock.